IFRS 13
ey.com/IFRS
Issue 2 / May 2011
IFRS Developments
What you need to know
• Common requirements now exist between US GAAP and IFRS on how to measure fair value
• IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to measure the fair value of financial and non-financial assets and liabilities when required or permitted by IFRS
• While many of concepts in IFRS 13 are consistent with current practice, certain principles, such as the prohibition on blockage discounts for all fair value measurements, could have a significant effect on some entities • The disclosure requirements are substantial and could present challenges for many entities
• IFRS 13 is effective 1 January 2013 and will be adopted prospectively
• For more information on the changes to US GAAP, see our ‘To the Point’ article Fair value measurement guidance converges at www.ey.com/us/accountinglink. Fair value measurement guidance converges
The International Accounting Standards Board (IASB) and the US Financial Accounting
Standards Board (FASB) created a uniform framework for how to measure fair value for entities around the world.
By publishing IFRS 13 Fair Value Measurement, the IASB established a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to measure fair value under IFRS when fair value is required or permitted by IFRS.
Reasons for issuing IFRS 13
The IASB has issued IFRS 13 for a number of reasons; the main reason being to reduce complexity and improve consistency in application when measuring fair value.
Many IFRS require or permit entities to measure or disclose the fair value of assets, liabilities, or equity instruments, but prior to the issuance of IFRS 13, the guidance on how to measure fair value was limited and, in some cases, the guidance was
Issue 2 / May 2011
IFRS Developments
What you need to know
• Common requirements now exist between US GAAP and IFRS on how to measure fair value
• IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to measure the fair value of financial and non-financial assets and liabilities when required or permitted by IFRS
• While many of concepts in IFRS 13 are consistent with current practice, certain principles, such as the prohibition on blockage discounts for all fair value measurements, could have a significant effect on some entities • The disclosure requirements are substantial and could present challenges for many entities
• IFRS 13 is effective 1 January 2013 and will be adopted prospectively
• For more information on the changes to US GAAP, see our ‘To the Point’ article Fair value measurement guidance converges at www.ey.com/us/accountinglink. Fair value measurement guidance converges
The International Accounting Standards Board (IASB) and the US Financial Accounting
Standards Board (FASB) created a uniform framework for how to measure fair value for entities around the world.
By publishing IFRS 13 Fair Value Measurement, the IASB established a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to measure fair value under IFRS when fair value is required or permitted by IFRS.
Reasons for issuing IFRS 13
The IASB has issued IFRS 13 for a number of reasons; the main reason being to reduce complexity and improve consistency in application when measuring fair value.
Many IFRS require or permit entities to measure or disclose the fair value of assets, liabilities, or equity instruments, but prior to the issuance of IFRS 13, the guidance on how to measure fair value was limited and, in some cases, the guidance was