Question

Based on:

1. IFRS 13, Fair Value Measurement

Answer 1

IASB issued IFRS 13 on12th May 2011 ,which established a single source of Guidance in relates to FV ( Fair value)

IFRS 13 basically a single framework relates to fair Value and this fair value is applicable relates to Financial as well as Non Financial , fair value represents the price would be received to sell and asset or paid to transfer a Liability in order to maintain transaction among market participant at an exit price

IFRS 13 will be applicable on prospective basis from the start of the annual period in which the standard is adopted

Many other IFRS require the use of fair value but prior to IFRS 13 there was no such single definition . IFRS 13 basically remove inconsistency through a single definition to be applied to all Fair value measurement and disclosure

IFRS 13 is talking about “ Unit of account “. IFRS 13 talking about : portfolio Exception” which consist of financial asset and Liability to manage together with offsetting market risk and counterparty credit risk

IFRS 13 is classified market as Principle / most advantageous market

IFRS 13 talking about Valuation Technique which are “ the market approach “ + “ the cost approach” The Income Approach”

Also need to understand that IFRS 13 depends in whether fair value measurement is recurring and non recurring

IFRS conceptual Framework include a set of comprehensive concepts for financial reporting . standard setting , provide guidance and prepare report to provide accounting policy on consistent basis . Conceptual framework also assist others to understand and interpret standards

IASB has a comprehensive and consistent framework which it can use a basis for developing and revising IFRS standard

IFRS 13 is a new standard that define about Fair value which is set out in a single framework relates to measuring fair value and disclose the same .

IFRS 13 fair value indicates about – Unit of accountant , nature of market – like Principal / most advantageous market . utilisation of asset ( either single asset utilised – standalone basis ) , Valuation Technique

Latest standard is talking about Fair value of liability and Equity , concept of offsetting position along with valuation Technique

So it is quite distinct that new standard IFRS 13 is in line with IFRS conceptual framework