IFRS Foundation issues educational material on fair value measurement
20 Dec 2012
As part of the IASB’s Education Initiative, the IFRS Foundation staff — with the assistance of the valuation expert group — has issued the first chapter of educational material to accompany IFRS 13, titled 'Measuring the fair value of unquoted equity instruments within the scope of IFRS 9 Financial Instruments'.
This 71-page chapter addresses the fair value measurement of unquoted equity instruments. It presents a range of commonly used valuation techniques for measuring the fair value of unquoted equity instruments within the market and income approaches, as well as the adjusted net asset method. This chapter does not prescribe the use of a specific valuation technique, but instead encourages the use of professional judgement and the consideration of all facts and circumstances surrounding the measurement.
It is the first of a series of chapters of educational material provided to support IFRS 13. These chapters are being developed to describe, at a high level, the thought process for measuring assets, liabilities and an entity’s own equity instruments at fair value, ensuring consistency with the objective of a fair value measurement set out in IFRS 13. Additional chapters will be published as they are finalised.
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