The valuation premise

Learning objectives

• Determine the valuation premise (use in combination or on a stand-alone basis) and the resulting value of the asset.L3

Normative references

• IFRS 13 §31Highest and best use establishes the valuation premise: the asset is used in combination with other assets or liabilities, or on a stand-alone basis.
• IFRS 13 §32The measurement of a non-financial asset assumes its sale consistent with the unit of account specified in other Standards (sometimes the individual asset), even when its highest and best use is in combination: the market participant is assumed to already hold the complementary assets and the associated liabilities.
• IFRS 13 §33Cross-reference: the application of the valuation premise to non-financial assets is described in paragraph B3.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Under the stand-alone premise, what price is used for the non-financial asset?L3