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Fair Value Measurement under IFRS 13: A Faithful Representation of Real-World Economic Phenomena?

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Abstract

In this paper, we discuss IFRS 13 with regard to private equity valuation We raise issues on the fair value definition as an exit price and question the reliability of valuation techniques which are categorized into Level 2 fair value hierarchy. Our paper questions whether fair value as defined by IFRS 13 is an appropriate measure for private equities and can contribute to enhancing transparency and comparability in financial statements, which is one of the purposes of the IASB and the European Union Regulation 1606/2002.

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  • Palea Vera & Maino Renato, 2012. "Fair Value Measurement under IFRS 13: A Faithful Representation of Real-World Economic Phenomena?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201210, University of Turin.
    • Handle: RePEc:uto:dipeco:201210
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    1. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    2. Baiman, S & Verrecchia, RE, 1996. "The relation among capital markets, financial disclosure, production efficiency, and insider trading," Journal of Accounting Research, Wiley Blackwell, vol. 34(1), pages 1-22.
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