EBA: IASB post-implementation review of IFRS 13 Fair Value Measurement

03 October 2017

The EBA has commented on the IASB Post-implementation Review (PIR) of IFRS 13 Fair Value Measurement (IFRS 13).

The EBA welcomes the IASB project to evaluate the effectiveness of IFRS 13 on financial reporting and to focus on those areas which were identified as requiring further investigation by stakeholders during the previous phase of this project. Fair value accounting is one of the cornerstones of the financial statements of banks, as banks’ assets are mainly financial assets, a significant portion of which are measured at fair value and all of which are subject to fair value disclosures.

The EBA believes that introduction of IFRS 13 has improved the financial information provided in the banks’ financial statements and contributed to the understanding of their balance sheets. The application of the Standard by banks has also highlighted some areas where it would be beneficial to provide further guidance in the Standard or additional disclosures. In particular, the IASB could provide further guidance on the definition of an ‘active market’, or ‘significant unobservable input’ as this influences the classification of financial instruments across the different levels of the fair value hierarchy,  in order to improve consistency in the application of IFRS 13 and comparability across banks.

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