www.ChartAcc.com - IFRS 13 defines hierarchy to determine Fair Values for measurement and disclosure purposes.
Three levels of hierarchy are categorised as follows:
- Level 1 - Quoted prices:
- These are observable prices
- available in Active Markets (Click for definition)
- for identical assets or liabilities
- that the entity can access at the measurement date.
- Level 2 - Unquoted but Observable prices:
- These are unquoted market prices (i.e. other than above, Level 1)
- observable; either directly or indirectly
- with quoted prices of:
- similar assets or liabilities in Active Markets
- identical or similar assets or liabilities in markets that are not active
- with unquoted prices that are:
- observable for the asset or liability
- derived from observable market data by correlation or other methods.
- Level 3 - Unobservable prices:
- These are prices for which observable inputs are not available and
- derived from:
- assumptions
- similar circumstances
- market participants.
Read more here:
More about IFRS 13
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