At previous meetings the Boards have agreed or tentatively concluded that fair value is the relevant measure of assets and liabilities on initial recognition.

The staff proposed that the fair values should be determined based on 'wholesale' fair values. They noted that these might not be available in all circumstances. In these cases fair value estimates based on market-based information such as:

• Prices that its existing subcontractors charge for identical or similar products and services.
• Prices that marketplace participants would charge for identical or similar products and services if the entity decided to outsource its performance obligations
• Prices that the vendor charges when it sells identical or similar products and services to prime contractors (if it acts in a subcontracting capacity) or to resellers.

• Retail prices of identical or similar products and services when sold separately by the vendor (vendor-specific prices)
• Retail prices that the vendor's competitors charge for identical or similar products and services (third-party prices).

A number of IASB Board members expressed concern as to the use of the wholesale fair value approach. It was noted that they agreed to use the approach as a working principle.

The Boards agreed with the use of a hierarchy as set out above. Some concern was expressed that the hierarchy allowed default measures that had different measurement objectives than the 'wholesale' method and that a principle of what the objective is should be expressed and how it should be achieved when there is no direct measure, or observable price of similar items, should be left silent. It was agreed that the staff should further explore this.