Measuring fair value – Share your experience of IFRS 13

Measuring fair value – Share your experience of IFRS 13

The IASB has issued a request for information seeking feedback in several areas of focus


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Now is the time to provide input on application issues with IFRS 13

Since it came into effect in 2013, IFRS 13 Fair Value Measurement has given rise to a number of implementation issues. In response, the IASB has issued a request for information (RFI) on this standard. It seeks feedback from constituents on their experience of IFRS 13 so that the IASB can assess whether the standard is achieving its objectives.

To help assess whether new accounting standards and major amendments work as intended, the IASB conducts post-implementation reviews as part of its due process. The post-implementation review (PIR) of IFRS 13 consists of two phases.

During the first phase, the Board held meetings with many stakeholders to identify potentially challenging areas of application. Although the general consensus from stakeholders was that IFRS 13 has worked well and brought significant improvements to financial reporting, a number of areas were flagged in which it was felt that practical improvements could be made to the standard. The RFI launches the second phase of the PIR.


“There’s a real opportunity here for preparers to help shape improvements to IFRS 13 – a standard which for all its strengths can sometimes present tough implementation challenges. We encourage you to share your experience with the IASB.”


Wolfgang Laubach, KPMG’s global IFRS valuation and impairment topic team leader

Assessing the effect of IFRS 13 on financial reporting

In this second phase of the PIR, the IASB aims to assess whether:    

  • IFRS 13 provides information that is useful to users of financial statements;
  • the issues identified in the first phase create challenges in implementing IFRS 13, which can result in inconsistent application; and 
  • unexpected costs have arisen when applying the standard. 

Main areas of focus

Based on the feedback received in the first phase of the PIR, the RFI is now seeking responses to a number of questions including the following.

Area of focus Questions
Disclosures about fair value measurements – main
focus on Level 3 disclosures

  • How useful are the disclosures?
  • Which factors affect the usefulness – e.g. generic disclosures or disclosures for aggregated groups of assets and/or liabilities?
  • Which disclosures are the most costly to prepare?
  • Would
    other disclosures be useful?

Prioritising Level 1 inputs (PxQ) or the unit of account – measuring
quoted investments in subsidiaries, joint ventures and associates at fair value
  • How often do issues arise in this area?
  • Are there material differences between fair value on the basis of PxQ compared to other valuation techniques?
  • Which techniques are used in practice, and why?
Application of the concept of ‘highest and best use’ (HBU) for non-financial
  • Is the assessment of an asset’s HBU challenging, and why? 
  • How common is it that an asset’s HBU differs from its current use and what issues arise in such circumstances?
  • Is there diversity in practice?
Application of judgement in specific areas
  • Is it challenging to assess whether a market is active? 
  • Is it challenging to assess whether an input is unobservable and significant to the entire measurement?


In addition, the RFI explores the need for further guidance, such as education material, on measuring the fair value of biological assets and unquoted equity instruments.

Take the next step

If some of these issues affect you, we encourage you to share your experience of applying IFRS 13. The RFI is open for comment until 22 September 2017. 

The IASB will issue a report to present its findings and will issue a feedback statement which will set out the steps the IASB plans to take as a result of the review. Depending on the findings, the IASB might decide:   

  • to retain the existing requirements;       
  • to continue to monitor implementation issues; 
  • to develop or facilitate the development of further guidance, such as education material; or        
  • to revise IFRS 13 to address problems identified by the RFI.

For more information on the RFI, please go to the IASB press release or speak to your usual KPMG contact.

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