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IFRS 13 Fair Value

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 13 Fair Value

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by AvatarStephen Widberg.
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  • May 15, 2021 at 9:58 pm #620692
    Avatarjareerabedin
    Member

    Sir, I am having trouble understanding difference between principal market and most advantageous market. As far as I understand:

    Principal market: market where the entity actively trades in. It is generally assumed to be the market that represents best use. Principal market may not necessarily be the market with the highest volume and activity level, but rather it’s the market where the entity actively participates the most

    Most advantageous market: market from where the value of the best use and most advantageous use can be derived from. It’s the market that represents the highest value for an asset. It is used ONLY when principal market is not available.

    It may be possible that most advantageous market is the principal market for an entity.

    Please help me understand this topic sir. Am I correct? Or is there anything else I should be aware of?

    Thanks

    May 16, 2021 at 9:51 am #620733
    AvatarStephen Widberg
    Keymaster

    Look at example in our course notes (Fair Value chapter) – that summarises it very well. And, as always, keep it simple. 🙂

    You won’t have time to type out big definitions. Just greatest volume v maximum $.

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