IFRS 13 Fair Value Measurement

Question 1

FV definition

Answer 1

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.

Question 2

Hierarchy for inputs to valuation techniques:

Answer 2

1. Unadjusted quoted prices (active market) for identical items.
2. Inputs other than quoted prices that can be observed directly (price) or indirectly (derived from prices)
3. Unobservale inputs.

Question 3

Multiple markets, use FV in:

Answer 3

1. Principal market

2. Most advantageous market

Question 4

FV if a liability

Expected value of cash flows

Answer 4

Third-party contractor mark-up

Inflation adjustment

Risk premium

Discount to PV

Question 5

Measurement of Non-fin assets

Answer 5

Highest and best use that is physically possible, legal permissible and financially feasible.