Page 15 - SBR Integrated Workbook STUDENT S18-J19
P. 15
Frameworks
2.5 Markets
Assets and liabilities are sold at different prices in different markets.
IFRS 13 says that fair value should be determined by reference to the
principal market.
This is ‘the market with the greatest volume and level of activity for
the asset or liability’ (IFRS 13, Appendix A).
Entities can assume that the market in which they normally enter into a transaction is
the principal market unless there is evidence to the contrary.
If no principal market exists then fair value should be measured based on the price in
the most advantageous market.
This is the market that maximises the net amount received when
selling an asset (or minimises the net amount paid when transferring a
liability).
9
