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Ind-AS: 113 Fair Value Measurement (Out of Scope (Ind-AS: 102 (Share Based…
Ind-AS: 113 Fair Value Measurement
Objective
For valuation purposes at B/S date
under other Ind-AS
Out of Scope
Ind-AS: 102
Share Based Payments
Ind-AS: 36
Value in use, Recoverable amount
Ind-AS: 2
Net realisable value
Ind-AS:106
Leasing transactions
Ind-AS: 19
Plan assets measured at fair value
Factors
Only consider asset specific restrictions .
FV measurement may be for individual asset
or group of assets
Refer the connected Ind-AS and follow
what is required there
Individual asset measurement is preferred.
Transaction takes place in principal market
or most advantageous market
Principal - High volume of transactions of similar assets
Most advantageous - Which maximises amount received on
sale of asset
Expenses to be considered
Transaction cost
Principal - Not considered
MA - Considered
Transport cost
Principal - Considered
MA - Considered
Techniques
Market value
Quoted prices in active market for similar asset
Income approach
Present value of future cash flows expected
from use of asset
Replacement cost method
Cost for replacing similar asset
Inputs to Techniques
Maximise use of relevant observable inputs
and minimise use of unobservable inputs
Level II Inputs
Other than quoted prices in Level I
that are observable
Quoted prices for similar asset in active/non-active market, Int rates, implied volatilities
Level I Inputs
Quoted unadjusted prices in active markets
Level III Inputs
Unobservable inputs (assumptions)
Also includes observable input adjusted with
unobservable input
See flowchart on pg 4.90 for more clarity
Fair Value
Price received to sell asset or
pay liability
In orderly transaction
Btw market participants
At measurement date