In this article! we will briefly consider what this standard is and what requirements it imposes on fair value measurement under IFRS.
What is meant by the term “fair value”
Fair value is the price that could be received to sell an asset or paid to transfer a liability under current market conditions in an organized market between market participants at the measurement date.
In this case! the emphasis is placed on the value in IFRS? asset’s selling price. Thus! fair value bulk sms thailand corresponds to the market concept of the exit price. Also! the concept of fair value is a market indicator! and not the result of assessing specific objects.
This means that the company:
should be based on how market participants would value assets or liabilities
should not take into account its own approach to assessment
Conditions for determining fair value
Fair value under IFRS requires compliance with certain conditions that make how to organize preparation for the dipifr exam when there is very little time left? the transaction process as transparent as possible. Thus! to determine fair value! it is assumed that:
the parties enter into a transaction based on their own economic interests
the parties do not have obligations to each other that could affect the fair value of assets or liabilities
the owner of the asset or liability has provided full information about the subject of the transaction
the parties to the transaction will receive economic benefits when it is concluded
Fair Value Measurement Methods
The following three valuation methods are used directly to determine fair value:
market approach – fair value is determined based on information on sab directory the fair value of identical securities with market quotes
income approach – the essence of this approach is to identify the value of an asset and the amount of income it can generate! potential future income from the asset must be adjusted for the time value of money and the risks associated with the asset
cost approach – a set of methods for assessing the value of an appraisal object based on determining the costs required to reproduce or replace the appraisal object taking into account wear and tear and obsolescence.