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Private Equity Fair Value Measurement: A Critical Perspective on IFRS 13
Author(s) -
Palea Vera,
Maino Renato
Publication year - 2013
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/auar.12018
Subject(s) - comparability , fair value , accounting , valuation (finance) , international financial reporting standards , equity (law) , business , transparency (behavior) , financial instrument , mark to market accounting , actuarial science , economics , finance , financial accounting , accounting information system , political science , mathematics , law , combinatorics
In this paper, we discuss IFRS 13 Fair Value Measurement with regard to private equity valuation. We raise issues on the fair value definition as an exit price and question the reliability of valuation techniques, which are categorised into Level 2 fair value hierarchy. Our paper questions whether fair value as defined by IFRS 13 is an appropriate measure for private equities and can contribute to enhancing transparency and comparability in financial statements, which is one of the purposes of the International Accounting Standards Board and the European Union Regulation 1606/2002.