Q1: What is IFRS 13?
IFRS 13 is an International Financial Reporting Standard that provides guidance on fair value measurement and disclosure requirements for assets and liabilities, including financial instruments, non-financial assets, and liabilities.
Q2: What is the purpose of IFRS 13?
The purpose of IFRS 13 is to establish a single, comprehensive framework for measuring and disclosing fair value information. It aims to enhance consistency and transparency in financial reporting by providing a common language for fair value measurement and disclosure.
Q3: What is fair value?
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.
Q4: What types of assets and liabilities are covered by IFRS 13?
IFRS 13 applies to all types of assets and liabilities that are required or permitted to be measured at fair value under other IFRSs, including financial instruments, non-financial assets, and liabilities.
Q5: What are the key principles of fair value measurement under IFRS 13?
The key principles of fair value measurement under IFRS 13 are: (1) to use the highest and best use of the asset or liability; (2) to consider market participants; (3) to use observable inputs where possible, or unobservable inputs that are supportable by market data or other objective evidence; and (4) to ensure consistency in the application of fair value measurement.
Q6: What are the disclosure requirements under IFRS 13?
The disclosure requirements under IFRS 13 include information about the valuation techniques used to measure fair value, the significant inputs used in those techniques, the sensitivity of fair value measurements to changes in key assumptions, and the level of the fair value hierarchy at which the measurements are classified.
Q7: What is the fair value hierarchy?
The fair value hierarchy is a classification system that ranks the inputs used in fair value measurement into three levels, based on their degree of objectivity and reliability. Level 1 inputs are quoted prices in active markets for identical assets or liabilities, Level 2 inputs are observable inputs other than quoted prices in active markets, and Level 3 inputs are unobservable inputs.
Q8: Who is responsible for ensuring compliance with IFRS 13?
The entity's management is responsible for ensuring compliance with the fair value measurement and disclosure requirements of IFRS 13. Auditors are responsible for auditing the entity's compliance with those requirements and reporting on any identified deficiencies.
Q9: Are there any exceptions or exemptions to the requirements of IFRS 13?
IFRS 13 does not provide any exceptions or exemptions to its requirements. However, there may be specific industry or jurisdictional requirements that must be considered in determining the appropriate fair value measurement and disclosure requirements for certain assets and liabilities.