Fair value of liabilities and of equity

IFRS 13 Fair Value Measurement contains requirements on how to estimate the fair value of liabilities (and of own equity instruments). Those requirements produce sensible and useful outcomes. The Standard presents those requirements as achieving an overall objective of estimating the price for a transaction. But that transaction is one that, typically, cannot occur. This… Continue reading Fair value of liabilities and of equity

Own credit risk

The topic of own credit risk generates perhaps more strongly held views than any other accounting topic. For example, in around 2011, the IASB was developing a discussion paper on insurance contracts. Some of us visited one of the largest insurers in the world. They knew almost nothing about the project. But they had heard… Continue reading Own credit risk

Assumptions are not just a throw-away

The term ‘assumption’ figures prominently in some accounting standards, but can give the wrong impression. Where accounting standards refer to ‘assumptions’ The term appears in contexts where a preparer needs to make an accounting estimate. IAS defines accounting estimates as ‘monetary amounts in financial statements that are subject to measurement uncertainty’. Some IFRS standards use… Continue reading Assumptions are not just a throw-away