Topic 108 - Fair Value Measurement

This topic includes FAQs relating to the following IFRS standards, IFRIC Interpretations and SIC Interpretations:

IFRS 13 Fair Value Measurement

IFRIC 2 Members’ Shares in Co‑operative Entities and Similar Instruments

IFRIC 17 Distributions of Non‑cash Assets to Owners

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments


Other resources

  • IFRS At a Glance by standard is available here.


Sub-topic within this main topic are set out below, with links to IFRS Interpretation Committee agenda decisions and BDO IFRS FAQs relating to that sub-topic below each sub-topic:

Sub-topic NumberSub-topic and Related FAQ
108.1Scope and definitions
108.2Definition of fair value
108.3The transaction, market participants and the price
108.4Application to non-financial assets
108.5Application to liabilities and an entity’s own equity instruments
108.6Application to financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk
108.7Fair value at initial recognition
108.8Valuation techniques
108.9Fair value hierarchy
108.11Other issues




Text of FAQ

IFRIC Agenda Decision - The fair value hierarchy when third-party consensus prices are used

January 2015 - The Interpretations Committee received a request to clarify under what circumstances prices that are provided by third parties would qualify as Level 1 in the fair value hierarchy in accordance with IFRS 13 Fair Value Measurement. The submitter noted that there are divergent views on the level within the hierarchy in which fair value measurements based on prices received from third parties should be classified.


The Interpretations Committee noted that when assets or liabilities are measured on the basis of prices provided by third parties, the classification of those measurements within the fair value hierarchy will depend on the evaluation of the inputs used by the third party to derive those prices, instead of on the pricing methodology used. In other words, the fair value hierarchy prioritises the inputs to valuation techniques, not the valuation techniques used to measure fair value. In accordance with IFRS 13, only unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date qualify as Level 1 inputs. Consequently, the Interpretations Committee noted that a fair value measurement that is based on prices provided by third parties may only be categorised within Level 1 of the fair value hierarchy if the measurement relies solely on unadjusted quoted prices in an active market for an identical instrument that the entity can access at the measurement date.

The Interpretations Committee also observed that the guidance in IFRS 13 relating to the classification of measurements within the fair value hierarchy is sufficient to draw an appropriate conclusion on the issue submitted.

On the basis of the analysis performed, the Interpretations Committee determined that neither an Interpretation nor an amendment to a Standard was necessary. Consequently, the Interpretations Committee decided not to add this issue to its agenda.

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