One of the key trends in the development of international accounting standards is the move towards the use of fair market values of assets and liabilities.
In a number of cases, preparing IFRS or US GAAP financial statements requires recognizing tangible and intangible assets at fair value:
- Fair market valuation of property, plant and equipment and construction in progress for first-time adoption of International Financial Report Standards (IFRS 1);
- Revaluation of property, plant and equipment or biological assets (IAS 16 or 41);
- Fair market valuation of assets and liabilities for acquisition cost allocation purposes (IFRS 3 or SFAS 141 revised);
- Impairment testing of property, plant and equipment, intangible assets and goodwill (IFRS 36 or SFAS 142);
- Valuation of financial instruments to recognize them at fair value in financial statements (IFRS 39);
- Valuation of investment property (IAS 40);
- Valuation of share-based payments (IFRS 2 or ASC 718 and 505-50) etc.
Fair market valuation of assets and liabilities for the purposes of preparing financial statements entails not just knowledge of valuation techniques in accordance with Russian and international standards, but also understanding of IFRS or US GAAP requirements. As part of an international network of audit and advisory firms, we benefit from considerable methodological support on issues relating to the requirements of international standards.