Overview

The Standards establish extensive disclosure requirements regarding fair value measurement. These requirements relate, among other things, to the valuation techniques used, the inputs used and the quality of these inputs (with an emphasis on Level 3 inputs, which are much more subjective); to the transfer between levels of the fair value hierarchy; and so forth.

In principle, reporting entities shall present the quantitative disclosures required by the Standards in a tabular format unless another format is more appropriate. Detailed illustrative examples were published as an appendix to the Standards; these examples illustrate, among other things, quantitative disclosure in a tabular format, which includes disaggregation into classes. The examples included in this section are based (with some changes) on the examples in the appendix to International Financial Reporting Standard (IFRS) 13.

The Scope of the Disclosure Requirements

Under IFRS, it should be mentioned that the disclosure section does not apply to certain fair value measurements, which are subject to IFRS 13's measurement provisions (for more information, see Chapter 2, Section 2.3).

The disclosure chapter of the Standards includes provisions that relate only to measurement of assets or liabilities. Therefore, when the reporting entity measures fair value, but not in the context of assets or liabilities (e.g., measuring the fair value of equity instruments issued as consideration as part of a transaction for the extinguishment of a financial liability with equity instruments, which is accounted for under IFRS in accordance with International Financial Reporting Interpretations Committee's Interpretation 19 (IFRIC 19)), in our view, such disclosure provisions will not apply. Furthermore, in our view, a similar conclusion applies to the measurement of fair value of the equity instruments of the reporting entity used as consideration in a business combination.

IFRS 13's explanatory notes clarify that the disclosure provisions apply only to subsequent measurements (regardless of whether those measurements are recurring or nonrecurring; see below), and they do not apply to fair value measured at initial recognition of assets or liabilities. This is also the case in the August 2018 amendments in Accounting Standards Codification (ASC) 820 described in Section 3. Thus, for example, the disclosure provisions do not apply to measurement of the fair value of financial instruments at initial recognition or to measurement of the fair value of assets and liabilities recognized in a business combination