CR – Nov 2016 – L3 – Q4a – Fair Value Measurement (IFRS 13)

Define fair value as per IFRS 13, addressing the standardized approach to valuation.

Question

Prior to the advent of IFRS 13, many standards such as IAS 16, IAS 38, IAS 40, and IAS 39 required the use of fair value. These various requirements have been harmonized with the introduction of IFRS 13 Fair Value Measurement.

Required: Define fair value in accordance with IFRS 13. (2 Marks)

Answer

Fair value is defined by IFRS 13 as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Tags: Asset Valuation, Fair Value, IFRS 13, Liability Valuation
Level: Level 3

Topic: Fair Value Measurement (IFRS 13)

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