Objective behind the valuation techniques Ind AS 113
What is the objective behind the valuation techniques as per Ind AS 113?
The objective is to maximise the use of relevant observable inputs and minimise the use of unobservable inputs. Exchange markets, dealer markets, brokered markets and member-to-member markets are some of the examples of markets where the inputs might be observable for certain assets and liabilities. The inputs in this case refer to the characteristics of an asset or a liability that market participants normally take into account for determining the transaction. The fair value hierarchy gives highest priority to quoted prices in active market for identical assets or liabilities which are known as Level 1 input. Priority is given to unobservable inputs which are known as Level 3 inputs.
