Fair Value Definition - NEW vs.

OLD 14/09/13 23:09

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Fair Value Definition - NEW vs. OLD

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FAIR VALUE DEFINITION - NEW VERSUS OLD. Can you spot

the technical difference?

The International Accounting Standards Board published IFRS 13

Fair value measurements in May 2011. The standard provides a
new definition of FAIR VALUE and replaces all the requirements
contained in individual standards.

Precisely, IFRS 13:

(a) defines fair value;

(b) sets out in a single IFRS a framework for measuring fair value; and
(c) requires disclosures about fair value measurements.

The New Definition

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.

The Old Definition

Fair value is the amount for which an asset could be exchanged or a liability settled between
knowledgeable willing parties in an arms length transaction.
Can you spot the technical difference? Please feel free to drop your comments below.

0
COMMENTS

#1 Ioannis 2013-04-22 20:59 0

Any comments from anyone? An obvious difference is the reference of the
"measurement date" in order to specify a time reference of the fair value.

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