Fair Value Hierarchy at Your Fingertips
Recall how IFRS 13 defines fair value and prioritizes valuation inputs.
Definition What is fair value under IFRS 13? An exit price in an orderly transaction between market participants at the measurement date. It is not entity-specific intent or a fire-sale price. Compare Entity-specific value vs. IFRS 13 fair value Fair value uses market assumptions even when management intends to hold the item. Hierarchy 123 What do Level 1, Level 2, and Level 3 mean? Objection We are not selling it, so exit price is irrelevant. Management challenges a fair-value measurement for a held investment. Your line IFRS 13 uses an exit price premise even when the entity plans to hold…
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