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Financial reporting should be in a way which can clearly show the position of firm hence management and accountants of any firm should use some reliable measures which are scientific and logical so that they can clearly present the data which are also reliable so that they can manage their business operations in an efficient manner which can provide better output to the company. This Report explained by our experts of online assignment help services, which is based on the fact that whether to adopt historical values of assets held by cited entity or to use fair market value of those assets by the accountants of any firm. To remove the confusion to choose either of these two is clarified through the below mentioned facts and concepts so that users can get better relevant informations in order to make any decision regarding their investments. And this also enable the managers to ascertain the actual financial situation of firm.
The International Accounting Standard Board (IASB) is a private institution which deals in development and various other improvement of standards made for financial reporting i.e. International Financial Reporting Standards. Its main work is to oversight the IFRS in order to make the statements of finance more reliable and more credible so that healthier presentation can be made in front of its users.
IFRS 13 Fair Value Measurement
This standard of of IFRS has been issued by international accounting standard board of 12th day of May 2011 in which the use of fair market in the valuation of assets of any enterprise has been mentioned so that they can value them on that amount which they can get as proceeds of such fixed as well as current assets on selling them in open market. There are various other objectives which are behind issuing such standards. And these are described below...
IFRS 13 do not contain those specific criteria in which it has been mentioned that when such assets of any entity should be valued of market value. As these criteria are described in some other standards.
On the other hand there are some particular IFRS which specify some assets which should valued only at fair market value(Armstrong, Guay and Weber, 2010). Which can be measured on each reporting date, means that they should value such assets on each date so that they can get the amount of asset on which they can get as sale proceed on selling them on same date. In some other cases such as alteration in assets it can be possible that these are quantify on recurring basis.
The above mentioned standard can be applied on the assets which meets the specific criteria which have been mentioned there in other standards as well as to those assets in which some assets are specifically described. IFRS 13 can be applied on both financial and non financial data which are there in transaction of any company but these are guided through limited scope exclusion(Barth and Landsman, 2010). This provides guidance which is purely based on principle which are scientifically approved and universally accepted as through following these principle based guidance of IFRS 13 an entity can easily and effectively quantify its available possessions. It does not attempt to exclude any judgement which is their in valuation as every enterprise can adopt their different and realistic methods of valuation. Rather than this it mention the framework through which it can remove the inconsistency which is their in quantifying the possessions of entity. It can also enhance the comparison capability during fairly quantification measurements. Standard remains effective during the whole financial year so that their can be consistency in measurement as early adoption of such methods will continue till end.
There are certain scope exclusions are mentioned there in IFRS 13, which are mentioned as under.
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