Relevance of fair value for non-financial assets

How is fair value concept relevant for non-financial assets?

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Highest and best use is determined from the perspective of market participants, even if the entity intends a different use. However, an entity’s current use of a non-financial asset is presumed to be its highest and best use unless market or other factors suggest that a different use by market participants would maximise the value of the asset.

Objective of the fair value as per Ind AS 113

Objective of the fair value as per Ind AS 113 What is the objective of the fair value as per Ind AS 113? Ind AS 113 sets out a framework for measuring fair value including the definition of the fair value and the necessary disclosures about fair value measurements. Fair value is …
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Objective behind the valuation techniques Ind AS 113

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 …
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Fair value and how it is defined

Fair value and how it is defined What is the fair value and how it is defined? Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement …
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Fair value hierarchy mentioned as per Ind AS 113

Fair value hierarchy mentioned as per Ind AS 113 What is the fair value hierarchy mentioned in Ind AS 113? Ind AS 113 establishes a fair value hierarchy that categorises into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to …
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