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My basic understanding of exit price is the price the seller would receive in the principle market, whereas entry price is the price the buyer is offering to buy the same asset.
How should I explain on why the standard uses exit price instead of entry price?
You need to state the rule not explain it’s logic – there would be no credit for that.
In my view they simply had to make a decision between entry and exit, or they could have gone for a middle figure.
You may find the podcast interesting if you are interested in the development of the standard:
https://www.ifrs.org/content/dam/ifrs/project/fair-value-measurement/fairvalue060511.mp3
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