Page 397 - SBR Integrated Workbook STUDENT S18-J19

Chapter 25

Answers

Chapter 1

Example 1

Inputs

Truffle has determined a fair value using its own data. This is not an
observable input and therefore constitutes a level 3 input. IFRS 13 gives
lowest priority to level 3 inputs.

The shares are listed and so a level 1 input is available – a quoted price in an
active market for an identical asset. Truffle should use the listed share price
when determining the fair value of its investment.

It is irrelevant that Truffle has no intention of selling the shares. Fair value is a
market-based measurement, and is not entity-specific.

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