What is the name of IFRS 13?

Understanding IFRS 13: Fair Value Measurement

When it comes to financial reporting, consistency and clarity are key—especially when valuing assets and liabilities. This is where IFRS 13 Fair Value Measurement comes in. Issued by the International Accounting Standards Board (IASB) in May 2011, IFRS 13 brought a unified definition and framework for how fair value should be applied across financial statements.

Prior to IFRS 13, different standards used varying definitions and methods for fair value, which sometimes led to confusion and inconsistency. The introduction of IFRS 13 changed that by establishing a single, clear definition: fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

This standard doesn’t introduce new requirements for when assets or liabilities must be measured at fair value—those rules remain in the relevant IFRS standards. Instead, IFRS 13 focuses on how fair value should be determined and disclosed. It emphasizes market-based measurements and introduces a fair value hierarchy that prioritizes observable inputs over unobservable ones, helping users better understand the reliability of the valuations presented.

One of the key contributions of IFRS 13 is its comprehensive disclosure requirements. Companies must now provide more detailed information about inputs, valuation techniques, and the hierarchy level used, increasing transparency for investors and stakeholders.

In practice, IFRS 13 applies to nearly all assets and liabilities measured at fair value, from financial instruments to property and intangible assets. By standardizing the approach, it has improved comparability across companies and jurisdictions, reinforcing trust in global financial reporting.