Changing a technique

Learning objectives

• Assess whether a change in valuation technique is appropriate and what disclosure it requires.L3

Normative references

• IFRS 13 §65Valuation techniques are applied consistently; a change in a technique or in its application is appropriate if it results in a measurement that is equally or more representative of fair value.
• IFRS 13 §66A revision resulting from a change in a valuation technique or its application is accounted for as a change in accounting estimate in accordance with IAS 8, without the disclosures that IAS 8 requires for a change in accounting estimate.

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

3 questions

• During the year, an entity considers dropping the technique it used to measure an instrument. In which case is the change appropriate?L3
• A management controller reviews four decisions about the valuation technique for the same portfolio. Which one is open to challenge?L3
• Halvane measured a portfolio of unquoted shares using a given valuation technique. Case data: new market information arising in the year makes another technique more representative of fair value, and Halvane changes to it. How is the resulting revision of fair value treated?L3