Active market
An active market assessment depends on actual activity for the item being measured. An unadjusted quoted price in an active market for an identical asset or liability accessible at the measurement date is a Level 1 input in the IFRS 13 fair-value hierarchy. The existence of a quoted price alone does not prove that trading is sufficiently frequent and voluminous.
Worked example
Shares trade regularly throughout each working day on a major exchange, and an entity can access that market at the measurement date. The quoted price for identical shares is a Level 1 input if the other IFRS 13 conditions are met.
Common mistake
Calling a market active merely because a historical quote exists, or assuming an adjusted price remains an unadjusted Level 1 input.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |