which of the following is a required fair value disclosure? course hero

What is the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements?

For certain unobservable inputs, an entity may disclose other quantitative information (such as the median) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements .

What were the first disclosures on the chopping block?

The first on the chopping block were disclosures related to fair value measurements, which were numerous. Many entities, especially nonfinancial entities, found the disclosures costly to prepare and stated that their users are not interested in such disclosures.

What is measurement uncertainty disclosure?

The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date.

Do you have to disclose the timing of an investment?

For investments in certain entities that calculate net asset value, an entity is required to disclose the timing and liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly.

What is the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements?

For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) instead of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements.

What is measurement uncertainty disclosure?

The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. For recurring fair value measurements categorized within Level 3 of the fair value hierarchy, a narrative description of the uncertainty of the fair value measurement from the use of significant unobservable inputs, if those inputs reasonably could have been different at the reporting date, is required.

What is the purpose of ASU 2018-13?

The FASB issued ASU 2018-13 as part of its disclosure framework project, which has an objective and primary focus to improve the effectiveness of disclosures in the notes to financial statements. As part of the project, during August 2018, the Board also issued a Concepts Statement, [3] which the FASB used as a basis for amending the disclosure requirements for Topic 820.

When should the amendments be applied retrospectively?

Upon adoption, the amendments should be applied retrospectively to all periods presented, except the amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

Do you have to disclose the timing of liquidation of an asset?

For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the reporting entity or announced the timing publicly. If the timing is unknown, the reporting entity shall disclose that fact.

When dis­closures are required to be provided for each class of asset or liability, an entity de­ter?

Where dis­clo­sures are required to be provided for each class of asset or liability, an entity de­ter­mines ap­pro­pri­ate classes on the basis of the nature, char­ac­ter­is­tics and risks of the asset or liability , and the level of the fair value hierarchy within which the fair value mea­sure­ment is cat­e­gorised . [IFRS 13:94]

What is fair value measurement?

The objective of a fair value mea­sure­ment is to estimate the price at which an orderly trans­ac­tion to sell the asset or to transfer the liability would take place between market par­tic­i­pants at the mea­ sure­ment date under current market con­di­tions.

What is the purpose of IFRS 13?

IFRS 13 seeks to increase con­sis­tency and com­pa­ra­bil­ity in fair value mea­sure­ments and related dis­clo­sures through a 'fair value hierarchy'. The hierarchy cat­e­gorises the inputs used in valuation tech­niques into three levels. The hierarchy gives the highest priority to (un­ad­justed) quoted prices in active markets for identical assets or li­a­bil­i­ties and the lowest priority to un­ob­serv­able inputs. [IFRS 13:72]

What does an entity take into account when pricing an asset?

An entity takes into account the char­ac­ter­is­tics of the asset or liability being measured that a market par­tic­i­pant would take into account when pricing the asset or liability at mea­sure­ment date (e.g. the condition and location of the asset and any re­stric­tions on the sale and use of the asset) [IFRS 13:11]

What is the fair value of an asset or liability?

If an entity holds a position in a single asset or liability and the asset or liability is traded in an active market, the fair value of the asset or liability is measured within Level 1 as the product of the quoted price for the in­di­vid­ual asset or liability and the quantity held by the entity, even if the market's normal daily trading volume is not suf­fi­cient to absorb the quantity held and placing orders to sell the position in a single trans­ac­tion might affect the quoted price. [IFRS 13:80]

What is level 1 input?

Level 1 inputs are quoted prices in active markets for identical assets or li­a­bil­i­ties that the entity can access at the mea­sure­ment date. [IFRS 13:76]

What is the use of a non-fi­nan­cial asset by market par­tic­i?

The use of a non-fi­nan­cial asset by market par­tic­i­pants that would maximise the value of the asset or the group of assets and li­a­bil­i­ties (e.g. a business) within which the asset would be used