{"id":2983,"date":"2025-11-15T14:58:22","date_gmt":"2025-11-15T14:58:22","guid":{"rendered":"https:\/\/usafe-ca.com\/?p=2983"},"modified":"2025-11-15T14:58:22","modified_gmt":"2025-11-15T14:58:22","slug":"ifrs-13-fair-value-measurement","status":"publish","type":"post","link":"https:\/\/usafe-ca.com\/zh\/2025\/11\/15\/ifrs-13-fair-value-measurement\/","title":{"rendered":"IFRS 13 Fair Value Measurement"},"content":{"rendered":"

IFRS 13 Fair Value Measurement \u2013 Framework, Valuation Techniques, and Disclosure Requirements<\/strong><\/h3>\n

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1\ufe0f\u20e3 Introduction: Understanding IFRS 13 Fair Value Measurement<\/strong><\/h5>\n

IFRS 13 Fair Value Measurement<\/strong> provides a single, consistent framework for measuring fair value across all IFRS standards.
In Singapore, where companies value investment properties, financial instruments, and intangible assets, IFRS 13 Fair Value Measurement<\/strong> ensures these valuations are transparent, comparable, and grounded in market-based assumptions<\/strong>.
Therefore<\/strong>, financial statements show clearer, more reliable fair-value information.<\/p>\n

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2\ufe0f\u20e3 Purpose and Scope<\/strong><\/h5>\n

IFRS 13 does not<\/strong> tell companies when<\/em> to apply fair value. Instead, it explains how<\/strong> to measure fair value when another IFRS requires it (such as IFRS 9, IFRS 16, IAS 40, and IAS 41).
The standard aims to create consistency in:<\/p>\n

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    Fair-value definition<\/p>\n<\/li>\n

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    Valuation techniques<\/p>\n<\/li>\n

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    Inputs and assumptions<\/p>\n<\/li>\n

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    Disclosure requirements<\/p>\n<\/li>\n<\/ul>\n

    As a result<\/strong>, users receive fair-value information that reflects real market conditions.<\/p>\n

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    3\ufe0f\u20e3 What Is Fair Value?<\/strong><\/h5>\n

    Under IFRS 13 Fair Value Measurement, fair value is:<\/p>\n

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    \u201cThe 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.\u201d<\/em><\/p>\n<\/blockquote>\n

    Key elements include:<\/p>\n

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      Exit price<\/strong> (not entry price)<\/p>\n<\/li>\n

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      Market participant perspective<\/strong><\/p>\n<\/li>\n

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      Orderly transaction<\/strong><\/p>\n<\/li>\n

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      Current market conditions<\/strong><\/p>\n<\/li>\n<\/ul>\n

      In addition<\/strong>, fair value reflects assumptions that knowledgeable, willing buyers and sellers would use.<\/p>\n

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      4\ufe0f\u20e3 The Fair Value Hierarchy (Level 1, Level 2, Level 3)<\/strong><\/h5>\n

      IFRS 13 classifies inputs into three levels:<\/p>\n

      Level 1 (Highest Priority)<\/strong><\/h3>\n

      Quoted prices in active markets for identical assets or liabilities.
      Examples:<\/strong> listed shares, REIT prices.<\/p>\n

      Level 2<\/strong><\/h3>\n

      Observable inputs for similar items or indirectly derived values.
      Examples:<\/strong><\/p>\n

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        Corporate bond yield curves<\/p>\n<\/li>\n

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        Interest-rate swaps<\/p>\n<\/li>\n

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        Valuations based on market comparables<\/p>\n<\/li>\n<\/ul>\n

        Level 3 (Lowest Priority)<\/strong><\/h3>\n

        Unobservable inputs, often requiring significant judgement.
        Examples:<\/strong><\/p>\n

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          Private-equity valuations<\/p>\n<\/li>\n

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          Investment property valuations<\/p>\n<\/li>\n

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          Valuation of unquoted shares<\/p>\n<\/li>\n<\/ul>\n

          Therefore<\/strong>, companies must prioritise Level 1 inputs whenever available.<\/p>\n

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          5\ufe0f\u20e3 Valuation Techniques Under IFRS 13<\/strong><\/h5>\n

          IFRS 13 Fair Value Measurement allows three main valuation techniques:<\/p>\n

          (a) Market Approach<\/strong><\/h3>\n

          Uses prices and information from market transactions.
          Example:<\/em> Comparable property transactions.<\/p>\n

          (b) Cost Approach<\/strong><\/h3>\n

          Based on replacement cost of the asset.
          Example:<\/em> Replacement cost of specialised machinery.<\/p>\n

          (c) Income Approach<\/strong><\/h3>\n

          Discounts future cash flows to present value.
          Example:<\/em> DCF valuation for investment properties.<\/p>\n

          As a result<\/strong>, companies choose the method that best reflects market assumptions.<\/p>\n

          IFRS 7 Financial Instruments: Disclosures<\/a><\/p><\/blockquote>\n