The International Accounting Standards Board (Board) has today published a summary report on its Post-implementation Review (PIR) of the fair value measurement Standard, IFRS 13, which showed that the Standard works as intended.
The Board conducts a PIR of new Standards and major amendments to a Standard after they have been in use around the world for two or three years. The purpose is to consider—with input from stakeholders—whether the Standard functions as expected and whether the information it requires companies to provide is useful to users of financial statements. A PIR also assesses whether any unexpected costs have arisen during implementation.
IFRS 13 Fair Value Measurement was issued in 2011 and came into effect in 2013. It provides principle-based guidance on how to measure fair value and disclosure requirements. IFRS 13 does not determine when fair value measurement is to be used.
The IFRS 13 PIR showed that the requirements of the Standard are working as intended and that the information companies provide applying the Standard is useful to investors. The Board also concluded that no unexpected costs have arisen from applying IFRS 13. The Board is now following up on feedback relating to disclosures about fair value measurement in its project on Targeted Standards-level Review of Disclosures, which is part of the Board’s work on Better Communication in Financial Reporting.
The PIR identified some challenges linked to the judgement the Standard requires companies to apply, however evidence gathered through the PIR showed that companies are finding ways to resolve these challenges. The Board decided to monitor developments in this area and to continue liaising with the valuation profession.
Hans Hoogervorst, Chair of the International Accounting Standards Board, said:
Post-implementation reviews are our way to check whether a Standard does the job it is intended to do. Stakeholder feedback and research on IFRS 13 show that overall, the Standard works well.
The Project Summary and Feedback Statement can be accessed here.