IASB November 2007

The Board discussed preliminary definitions of current entry price and current exit price. These definitions will be used in a standard-by-standard review to assess whether each fair value measurement currently required or permitted in IFRSs was intended to be a current exit price, a current entry price, or some other basis.

The Board tentatively decided that for the standard-by-standard review the preliminary definition of current entry price would be the price that would be paid to buy an asset or received to incur a liability in an orderly transaction between market participants at the measurement date. The preliminary definition of current exit price would be the price that would be received to sell an asset or paid to transfer or settle a liability in an orderly transaction between market participants at the measurement date. If a liability is transferred, it is assumed to exist beyond the measurement date; if a liability is settled, it is assumed to cease to exist at the measurement date. These preliminary definitions are subject to change in the light of the results of the standard-by-standard review and the decisions that will be made during the forthcoming deliberations on the fair value measurement project.