IFRS 13

Question 1

IFRS 13

Answer 1

Fair value as the amount that would be obtained from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Question 2

Fair value hierarchy

Answer 2

Determining Resale Price:

Level 1 Inputs:
- Quoted prices in active markets for identical assets or liabilities accessible at the measurement date.
- Enables direct price comparison (mark-to-market).

Level 2 Inputs:
- Inputs other than quoted market prices in Level 1, observable for the asset or liability, either directly or indirectly.
- Involves market-to-market valuation.

Level 3:
- Last resort when no active market or similar asset exists.
- Involves unobservable inputs for the asset or liability.
- If Level 3 is used, the entity must develop unobservable inputs using the best available information in the circumstances (market-to-model).