IFRS 13 Fair Value Measurement

Question 1

Fair Value is defined as

Answer 1

the price that would be received to sell an asset or paid to transfer a liability in orderly transaction between market participants at the measurement date

Question 2

Fair Value hierarchy

Answer 2

1. Level 1 - Comprised of quoted prices (‘observable’) in active markets for identical assets and liabilities at the measurement date
2. Level 2 - Observable inputs, other than those included within Level 1. Level 2 inputs include quoted prices for similar (not identical) asset or liabilities in active market, or prices for identical assets and liabilities in inactive markets.
3. Level 3 - Unobsrvable inputs for an asset or liability.

Question 3

The selection of fair value should not be restrictive to the basis of existing use but should be applicable for alternative use which gives the highest and best use provided the following is comply

Answer 3

1. Physically possible
2. Legally permissible
3. Financially feasible

Question 4

Measuring Fair Value of cryptocurrency

Answer 4

• Is not a cash or cash equivalent, exposed to significant changes in market value and there is no contractual right to received cash or cash equivalents
• Fails the definition of financial asset

If recognised as ITA, measured at cost, any gain or loss should be posted to OCI.