This quick reference guide summarizes the process of performing a fair value measurement under IFRS 13 Fair Value Measurement of a liability or an entity’s own equity instruments in 3 steps or less:
1) It first determines whether there is a quoted price for the transfer of an identical or similar liability/own equity instrument. If so, it uses that quoted price.
2) If not, it considers the value from the perspective of the market participant that owes the liability or issued the equity instrument.
3) It then uses an appropriate valuation technique, such as considering whether identical instruments are held as assets by other parties and using quoted prices adjusted for differences.
This quick reference guide summarizes the process of performing a fair value measurement under IFRS 13 Fair Value Measurement of a liability or an entity’s own equity instruments in 3 steps or less:
1) It first determines whether there is a quoted price for the transfer of an identical or similar liability/own equity instrument. If so, it uses that quoted price.
2) If not, it considers the value from the perspective of the market participant that owes the liability or issued the equity instrument.
3) It then uses an appropriate valuation technique, such as considering whether identical instruments are held as assets by other parties and using quoted prices adjusted for differences.
This quick reference guide summarizes the process of performing a fair value measurement under IFRS 13 Fair Value Measurement of a liability or an entity’s own equity instruments in 3 steps or less:
1) It first determines whether there is a quoted price for the transfer of an identical or similar liability/own equity instrument. If so, it uses that quoted price.
2) If not, it considers the value from the perspective of the market participant that owes the liability or issued the equity instrument.
3) It then uses an appropriate valuation technique, such as considering whether identical instruments are held as assets by other parties and using quoted prices adjusted for differences.
Chartered Accountants Program Financial Accounting & Reporting
Unit 6 Quick reference guide 6.2 Page 6-1
QRG Quick reference guide 6.2 Fair value measurement of a liability or an entitys own equity instruments This diagram shows the process of performing a fair value measurement under IFRS 13 Fair Value Measurement of a liability or an entitys own equity instruments. YES NO NO NO Quoted price for transfer of an identical or similar liability/own equity instrument? Value from the perspective of market participant that holds the asset Use an appropriate valuation technique Value from the perspective of market participant that owes liability or issued equity instrument Identical instruments held as an asset by another party? Quoted price in an active market for identical instrument held as asset? YES Use quoted price YES Use quoted price (adjusted for diferences) Source: Adapted from KPMG June 2011, First impressions: Fair value measurement, p. 8, accessed 15 July 2013, www.kpmg.com, search for fair value measurement.