www.ChartAcc.com - To measure
Fair value under IFRS 13 Purpose of tecniques to be used is as follows:
- Sufficient data should be available that
- maximises the use of relevant observable inputs and
- minimises the use of unobservable inputs.
Three techniques to measure
Fair value are as follows:
- Market approach:
- Prices and other related information
- generated by market transactions
- involving identical / comparable / similar assets and liabilities or a group of assets and liabilities.
- Cost approach:
- Amount that would be required currently to replace the service capacity of an asset
- Particularly called Current Replacement Cost
- Income approach:
- Present value (Discounted price)
- of future amounts (cash flows or income less expenses)
- that reflects current market expectations.
Above techniques can be for single or multiple valuations collectively wherever appropriate.
Read more here:
More about IFRS 13
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Posted by Vikrmn: Author of "10 Alone" (CA Vikram Verma) 10Alone.com
