IFRS 13 – Fair value measurement

Content of the training

• Overview of standards requiring measurement of assets and liabilities at fair value 
• Definition of fair value
• Fair value as exit price including application of the bid-ask spreads
• Other aspects of the fair value definition – orderly transaction, market participants, principal / most advantageous market 
• Fair value at initial recognition + booking of day one gains or losses - Specific requirements for measurements of liabilities and equity instruments issued 
• Offsetting positions in credit and market risks
• Requirements applied to valuation techniques and inputs 
• Types of valuation techniques – market, income, cost approach  
• Present value techniques 
• Fair value in inactive markets  
• Principles of fair value hierarchy – categorisation of the measurements into Level 1, 2 and 3
• Using 3rd party quotes 
• Specific principles for measurement of non-financial assets – highest and best use + examples 
• Specific requirements for measurement of non-financial liabilities 
• Disclosures about fair values
• General requirements for disclosures
• Disclosures for financial instruments – detailed description, practical examples, summary in the tables distinguishing requirements for interim and annual reports 
• Disclosures for non-financial assets and liabilities – description + summary in the table 

After completing the training the participants will understand

• in what cases fair value measurements are used 
• principles of fair value measurement based on the fair value being an exit price determined from market participants’ perspective
• valuation models which can be used for fair value measurement in particular situations
• jow fair value measurement should be approached if markets are inactive 
• how 3rd party price quotes can be used
• how fair value measurements are categorised into 3-level hierarchy
• disclosures in the area of hedge accounting based on practical examples

Target audience

• At banks and other financial institutions mainly employees at following departments: accounting, reporting, risk management, treasury, ALM, back office, middle office, controlling, internal audit, financial analyses of IFRS statements of customers 
• At non-financial companies mainly employees at following departments: accounting, reporting, risk management, controlling, internal audit  
• Audit companies
• Appraisers preparing valuations for accounting purposes 
• Supervisors and enforcers in the area of financial institutions accounting