Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In terms of where to start in the determination of fair value, it is useful to consider three broad steps that should be taken before delving into the details that inevitably will follow. These steps are important in illustrating the relationship between the primary IFRS which dictates when fair value measurement is required and IFRS 13 which is the “how” IFRS.

Step 1: Identify the balance or transaction that must (may) be measured or disclosed at fair value and when such measurement (disclosure) is necessary.

Step 2: Consult IFRS 13 for guidance on how to determine fair value upon initial recognition.

Step 3: Consult the “when” IFRS to determine if the subsequent measurement of the account balance is at fair value and/or if fair value disclosures are required.

Fair Value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price)”.

IFRS 13 Fair Value Measurement applies to IFRSs that require or permit fair value measurements or disclosures and provides a single IFRS framework for measuring fair value and requires disclosures about fair value measurement. The Standard defines fair value on the basis of an 'exit price' notion and uses a 'fair value hierarchy', which results in a market-based, rather than entity-specific, measurement.

IFRS 13 was originally issued in May 2011 and applies to annual periods beginning on or after 1 January 2013.

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price)”.

IFRS 13 is a new standard that defined fair value, sets out a single IFRS framework for measuring fair value, and requires disclosures about fair value measurements.

How can R.K Associates help you in Fair Value Measurement?

As we have an amount of good & rich experience in providing Valuation Services in India in Fair Value Measurement. Our experts understand the exact fair value of any asset by estimating the price at which an asset is bought or sold when both the buyer and seller freely agree on a price as per IndAS, IAS & IFRS  to give the exact fair value of any asset on which any industry can rely easily.