quoted prices for identical or similar assets or liabilities in markets that are not active.

quoted prices for similar assets or liabilities in active markets.

Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

If an entity holds a position in a single asset or liability and the asset or liability is traded in an active market, the fair value of the asset or liability is measured within Level 1 as the product of the quoted price for the individual asset or liability and the quantity held by the entity, even if the market's normal daily trading volume is not sufficient to absorb the quantity held and placing orders to sell the position in a single transaction might affect the quoted price. Ī quoted market price in an active market provides the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available, with limited exceptions.

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. If the inputs used to measure fair value are categorised into different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the level of the lowest level input that is significant to the entire measurement (based on the application of judgement). The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The hierarchy categorises the inputs used in valuation techniques into three levels. IFRS 13 seeks to increase consistency and comparability in fair value measurements and related disclosures through a 'fair value hierarchy'. a business) within which the asset would be used Most advantageous market The market that maximises the amount that would be received to sell the asset or minimises the amount that would be paid to transfer the liability, after taking into account transaction costs and transport costs Principal market The market with the greatest volume and level of activity for the asset or liability Fair value hierarchy Fair value 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 Active market A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis Exit price The price that would be received to sell an asset or paid to transfer a liability Highest and best use The use of a non-financial asset by market participants that would maximise the value of the asset or the group of assets and liabilities (e.g. measurements that have some similarities to fair value but that are not fair value, such as net realisable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets.Īdditional exemptions apply to the disclosures required by IFRS 13.leasing transactions within the scope of IAS 17 Leases.share-based payment transactions within the scope of IFRS 2 Share-based Payment.IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for: requires disclosures about fair value measurements.sets out in a single IFRS a framework for measuring fair value.Deloitte IFRS Podcast (May 2011, 10 minutes, 7mb).IFRS in Focus Newsletter IASB issues new standard on fair value measurement and disclosure summarising the requirements of IFRS 13 (PDF 78k, May 2011).

Staff draft of a IFRS on fair value measurement releasedĮffective for annual periods beginning on or after 1 January 2013Īmended by Annual Improvements to IFRSs 2010–2012 Cycle (short-term receivables and payables)Īmendment to the basis for conclusions onlyĪmended by Annual Improvements to IFRSs 2011–2013 Cycle (scope of portfolio exception in paragraph 52)Įffective for annual period beginning on or after 1 July 2014Īmendments under consideration by the IASB Project on fair value measurement added to the IASB's agendaĭiscussion Paper Fair Value Measurements publishedĮxposure Draft Fair Value Measurement publishedĮxposure Draft Measurement Uncertainty Analysis Disclosure for Fair Value Measurements published

Non market transaction definition