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Hi
I have a question related to audit of balances recognized at fair value, I understand that auditor needs to establish if management applied correctly different Levels 1-3 of inputs, Level 1 is most preferable
however, IFRS 13 allows also 3 valuation techniques but how can management apply valuation and comply with IFRS 13 when most desired input is level 1, quoted, unadjusted prices? isnt it contradiction in terms ?
I never got clear about this during P2 but what matters now is how to deal with this issue in P7?
any advice greatly appreciated
Thank you
Yes, most desirable is level 1 but, if that’s not available, then level 2 is acceptable. If that also is not available, then level 3 is ok.
You can only work with the information that is available
Then, dependent upon how reliable is the information, and how material is the fair valued item to the financial statements, auditor could get into a happy state. Or not!
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