The International Accounting Standards Board has issued a request for stakeholders to tell the board about their experience with the accounting standard that explains how to measure the ‘fair value’ of assets and liabilities, IFRS 13.
The aim is to check whether the standard meets its objectives.
This request is part of the Board’s Post-implementation Review (PIR) of IFRS 13 Fair Value Measurement. The objective of a PIR is to assess whether an accounting standard works as intended and achieves its objectives.
This assessment involves analyzing how the requirements in the standard affect investors, companies and auditors. The PIR also helps detect areas of a standard that may present challenges that could result in inconsistent application of the requirements.
The PIR of IFRS 13 consists of two phases. In the first phase, the Board identified topics for further analysis in the second phase. The second phase starts with a Request for Information (RFI) published today, and focuses on:
- disclosures about fair value measurements;
- further information about measuring quoted investments in subsidiaries, joint ventures and associates at fair value;
- application of the concept of the ‘highest and best use’ when measuring the fair value of non-financial assets; and application of judgement.
In addition, this RFI explores whether there is a need for further guidance on measuring the fair value of biological assets and unquoted equity instruments.
“Post-implementation Reviews form an important part of our work to maintain IFRS Standards, and I encourage our stakeholders to share their experience with IFRS 13,” says Hans Hoogervorst, IASB Chairman.
IFRS 13 defines fair value and sets out, in a single IFRS Standard, how fair value should be measured and which disclosures are required about fair value measurements. The Standard was issued in May 2011 and became effective from 1 January 2013.