FVM

This topic has 3 replies, 2 voices, and was last updated 3 years ago by Stephen Widberg.

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August 30, 2022 at 9:53 pm #664711
humai
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Sir in IFRS 13, we know that there are 3 approaches to FV, i.e market approach, cost approach and income approach.
My Qs is that level 1 , level 2 and level 3 inputs in FV calculation comes under which approach?
September 1, 2022 at 4:49 pm #664872
Stephen Widberg
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A bit theoretical!!!!
My best is:
Market = level 1 or 2
Income = level 3
September 2, 2022 at 11:05 pm #664982
humai
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And in cost approach which level comes?
September 3, 2022 at 9:31 am #665001
Stephen Widberg
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Perhaps at Level 3 if you are trying to estimate the FV of a unique asset – e.g. a tunnel under the river.
But don’t get too theoretical for this exam – it’s supposed to be testing our practical accounting.
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