Posts

IAS 36- Impairment of assets- Part 1

-
Image
In our previous blogs, we discussed methods of  fair value measurement  and various concepts associated with fair value of asset and liability. With the help of the concepts discussed, one should ensure that an exit price is based on market participants’ assumptions and entity-specific factors are not considered while measuring fair value. In this blog, we’ll discuss on  IAS 36: Impairment of assets.  IAS 36 is an accounting standard that helps companies ensure their assets are not valued higher than what they can actually recover from using or selling them. When an asset’s recorded value exceeds its recoverable amount (the higher of fair value less costs to sell or the value in use), it is said to be impaired. The standard requires companies to test assets for impairment regularly, especially for goodwill and certain intangible assets, and to reduce the asset’s value, if required, by recognizing an impairment loss. This ensures that financial statements reflects a r...
Post a Comment
Read more

IFRS 13: Fair Value Measurement- Part 1

-
Image
  Under IFRS, fair value is one of the vital measurement basis for the measurement or disclosure of few assets and liabilities. Some of the IFRSs contained limited guidance about how to measure fair value, whereas others contained extensive guidance and that guidance was not always consistent and sometimes ambiguous. Inconsistencies in the requirements for measuring fair value and for disclosing information about fair value measurements have contributed to diversity in practice and have reduced the comparability. This resulted in the issue of IFRS 13 – Fair value measurements, providing single source of guidance on all fair value measurement, clarity in definition, reducing earlier ambiguity and enhancing disclosures etc. IFRS 13  provides framework for measuring fair value, enhancing consistency and comparability in financial reporting. In this blog we’ll discuss, evaluate the definition of fair value and its key aspects and determine how to apply the same in arriving at the ...
Post a Comment
Read more

IFRS 13: Fair Value Measurement – Part 2

-
Image
  In our previous blog–  IFRS 13: Fair Value Measurement- Part 1 , we discussed on the definition of fair value and key aspects of which management requires to consider while determining fair value under IFRS 13. Fair value is an exit price, thus while measuring fair value one should consider the price of such asset or a liability on the basis of its units (standalone or within group like CGU) and its characteristics, price in a principal market or most advantageous market, price in hypothetical transaction between market participants & the price to take exit from that asset or a liability or group. We have discussed these concepts with the help of suitable examples.   In this blog, we will further discuss the few more concepts required for fair value measurement viz. factors to consider for a non-financial asset, valuation techniques and hierarchy of information to be used while determining FV. We know that fair value is not an entity specific measure but is mark...
Post a Comment
Read more