CERTYNEX IFRS ACADEMY

Tigre SA acquires a financial instrument for a transaction price of 1,000. Its fair value at inception, estimated using unobservable inputs, is 940 (case facts). What does IFRS 7 provide about this difference of 60?

IFRS 7 requires the difference to be recognised immediately in profit or loss; no disclosure is asked for on this matter, which makes any further explanation in the notes unnecessary.

Disclosures must be provided on the difference between the fair value at inception and the transaction price, where the measurement relies on unobservable inputs.

Nothing has to be provided as long as the instrument is classified in the most reliable level of the fair value hierarchy, whatever the difference.

The disclosure concerns the fair value of all the entity's instruments, with no link to the difference found at inception for this instrument.