Disclosure

1) An entity shall disclose information that helps users of its financial statements assess both of the following:
(a) For assets and liabilities measured at fair value on a recurring or non-recurring basis in the statement of financial position after initial recognition, the valuation techniques and inputs used to develop those measurements.
(b) For recurring fair value measurements using significant unobservable inputs (Level 3), the effect of the measurements on profit or loss or other comprehensive income for the period.

2) An entity shall follow the following table to determine items that should be disclosed.

CONCLUSION

Many of the HKFRS 13 requirements are consistent with industry practices that already operate today. However, it is the first time the concepts (e.g. highest and best use and principal market) have explicitly been part of HKFRS literature.

HKFRS 13 consolidates all fair value measurement guidance dispersed across different standards into a single standard as a single source of guidance on how fair value is measured. It makes the fair value measurement procedure standardised. The HKFRS 13 has made a clear explanation on the fair value, the market, the valuation technique, the concept of highest and best use and the fair value hierarchy.  This has established a framework for the entity and Valuers to follow when determining fair value.

Overall, HKFRS 13 is an important step forward in establishing an objective and consistent fair value measurement in the valuation industry.