Page 26 - Finac1 Test 2 slides - 1. Fair Value Measurement (IFRS 13)

IFRS 13

Elements of fair value measurement

Disclosure – Example

Serviplex Limited ('Serviplex’) is a retail company listed on the JSE Limited.
The chief financial officer recently contacted the audit firm at which you
are a technical manager, requesting the firm to assist him with the
measurement and disclosure of several assets in accordance with IFRS 13
Fair Value Measurement. Serviplex has a 31 December year end and the
following details regarding the assets and liabilities that are measured at
fair value in respect of the year ended 31 December 20.13 are made
available:

Investment properties

• Serviplex holds an office building that is leased out to third parties and
carried under the fair value model in IAS 40. In its current use the
present value of the net future cash flows was calculated at R8 550 000
on 31 December 20.13. On 31 December 20.13 this office building could

be sold in the open market for R9 150 000 before transaction cost of 5%.
The open market value was determined with reference to a limited
number of similar buildings, situated in the same location, that are
currently in the market.

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