Corporate Financial Reporting · Fair Value Measurement (Ind AS 113)

Ind AS 113 Disclosure Requirements Explained

Updated 11 October 2026 · Fact-checked

Ind AS 113 disclosures help users judge the valuation techniques and inputs behind fair values, and the effect of Level 3 measurements on profit or OCI. For each class of asset or liability, you give the fair value, the hierarchy level, techniques, inputs and, for recurring Level 3, a reconciliation.

Understand Disclosure Requirements under Ind AS 113

Fair value numbers involve judgement. Ind AS 113 therefore asks for disclosures that let a reader see how the number was built and how reliable it is. Paragraph 91 states two objectives: (a) the valuation techniques and inputs used for assets and liabilities measured at fair value after initial recognition, and (b) for recurring Level 3 measurements, the effect on profit or loss or OCI for the period.

First learn the two types. Recurring measurements are those that other Ind ASs require or permit in the balance sheet at the end of each reporting period, such as investments at fair value. Non-recurring measurements arise only in particular circumstances. The standard's example is an asset held for sale measured at fair value less costs to sell under Ind AS 105 because that is lower than carrying amount.

Disclosures are given by class of asset or liability (paragraph 94). Classes are decided on the nature, characteristics and risks of the item, and the hierarchy level. Level 3 may need more classes because it is more uncertain and subjective. A class is often more detailed than a balance sheet line, but you must give enough information to reconcile to the balance sheet line items.

The deeper the level number, the heavier the disclosure. Level 1 needs the basic items. Level 2 and 3 add technique and input descriptions (93(d)). Level 3, whether recurring or non-recurring, also adds quantitative information on significant unobservable inputs and a description of the valuation processes (93(g)). Recurring Level 3 alone adds the reconciliation, unrealised gains and sensitivity. Think of it as a ladder of increasing detail.

One disclosure sits outside this ladder. The transfer disclosures in 93(c) apply to transfers between Level 1 and Level 2 for recurring measurements held at the end of the period. They are not a Level 3 item.

Quantitative disclosures are presented in a table unless another format is more appropriate (paragraph 99). Ind AS 113 does not apply to share-based payments under Ind AS 102, leases under Ind AS 116, or measures like NRV and value in use (paragraph 6), so these do not attract its disclosures.

Key rules to remember

Objectives (para 91): Techniques and inputs used + effect of recurring Level 3 on profit or loss / OCI; Every disclosure traces back to these two objectives.
Basic disclosures (para 93(a)-(b)): Fair value at end of period + reasons (non-recurring only) + hierarchy level; Applies to recurring and non-recurring measurements, by class.
Level 1 / Level 2 transfers (para 93(c)): Transfers between Level 1 and 2 + reasons + policy for when transfers are deemed to occur; Required for recurring measurements held at period end. Transfers in and out are disclosed and discussed separately.
Level 2 and 3 technique (para 93(d)): Description of valuation technique(s) and inputs; change in technique and reason; Applies to recurring and non-recurring. For Level 3, add quantitative information on significant unobservable inputs.
Level 3 reconciliation (para 93(e)): Opening balance ± gains/losses in P&L ± gains/losses in OCI ± purchases, sales, issues, settlements (each separately) ± transfers into/out of Level 3 = Closing balance; Recurring Level 3 only. Transfers in and out are disclosed separately with reasons and policy.
Unrealised gains (para 93(f)): Part of P&L gain or loss in 93(e)(i) relating to assets and liabilities held at period end + P&L line item; Recurring Level 3 only.
Level 3 valuation process (para 93(g)): Description of valuation processes; Applies to recurring and non-recurring Level 3.
Level 3 sensitivity (para 93(h)): Narrative sensitivity + interrelationships; for financial instruments, effect of reasonably possible alternative assumptions if significant; Recurring Level 3 only.
Highest and best use (para 93(i)): If highest and best use of a non-financial asset differs from current use: state the fact and why; Recurring and non-recurring.
Not measured at fair value but fair value disclosed (para 97): Disclose 93(b), (d) and (i) only; no quantitative Level 3 input data; No other Ind AS 113 disclosures needed for these items.

How to solve Disclosure Requirements under Ind AS 113 questions

Use this sequence for any question asking what must be disclosed or whether a disclosure is missing.

1Identify whether each item is measured at fair value in the balance sheet or only has its fair value disclosed. If only disclosed, apply paragraph 97.
2Classify each item as recurring or non-recurring.
3Group items into classes by nature, characteristics, risks and hierarchy level, with a reconciliation to balance sheet lines.
4Note the hierarchy level of each class, since it decides the depth of disclosure.
5List the basic items: fair value at period end, level, and reasons for non-recurring measurement.
6Add technique and input descriptions for Level 2 and 3, and quantitative unobservable inputs for Level 3.
7For all Level 3 measurements, recurring and non-recurring, add the description of valuation processes (93(g)). For recurring Level 3 only, also add the reconciliation, unrealised gains and sensitivity.
8Check for Level 1/2 transfers (recurring measurements held at period end) and highest-and-best-use differences, then present in a table.

Quickest way: Level-and-type grid

When to use it: For MCQs and short-answer questions asking which disclosure applies to a given measurement.

Ask first: is the item measured at fair value, or only disclosed? Disclosed only means 93(b), (d), (i).
Ask: recurring or non-recurring? Reconciliation, unrealised gains and sensitivity are recurring Level 3 only.
Ask: which level? Level 1 needs no technique description; Level 2 and 3 do.
Quantitative unobservable input data is Level 3 only.
Reasons for measurement are non-recurring only.

Common mistakes in Disclosure Requirements under Ind AS 113

Requiring a reconciliation for all Level 3 measurements.
Students remember Level 3 as the heavy-disclosure level and stop there.
Fix: The reconciliation in 93(e) applies to recurring Level 3 only. Non-recurring Level 3 needs technique, inputs and valuation process, not a reconciliation.
Asking for quantitative unobservable inputs for Level 2.
Confusing the technique disclosure, which covers Levels 2 and 3, with the quantitative part.
Fix: Level 2 needs a description of technique and inputs. Quantitative data on significant unobservable inputs is Level 3 only.
Combining transfers into and out of Level 3, or between levels.
Students show only the net movement.
Fix: Transfers into each level are disclosed and discussed separately from transfers out, with reasons and the entity's policy on when transfers are deemed to occur.
Giving full Ind AS 113 disclosures for items measured at cost whose fair value is only disclosed.
Treating any mention of fair value as full scope.
Fix: Under paragraph 97 give only the level (93(b)), the technique and inputs where the item is Level 2 or 3 (93(d)), and highest-and-best-use information (93(i)). A Level 1 item needs no technique description, and quantitative Level 3 input data is not required.
Disclosing by balance sheet line instead of by class.
Lines are easy to read from the statements.
Fix: Determine classes by nature, characteristics, risks and level, then reconcile to the balance sheet lines.
Treating NRV or value in use as fair value measurements.
They look like valuation exercises.
Fix: Paragraph 6 excludes them, along with Ind AS 102 and Ind AS 116 transactions, from the standard's measurement and disclosure requirements.

Worked examples

Example 1

Sundaram Textiles Ltd holds (i) listed equity shares of Tata Motors measured at fair value through profit or loss each year using the quoted price on NSE, and (ii) an unlisted equity stake in a start-up measured at fair value each year using a discounted cash flow model with significant unobservable inputs. State the Ind AS 113 disclosures required for each.

Show the solution

Both are recurring: they are measured at fair value in the balance sheet at every reporting date.
Item (i) uses an unadjusted quoted price in an active market for identical shares, so it is Level 1. Disclose the fair value at period end and the level (para 93(a), (b)). Disclose any transfers between Level 1 and 2 with reasons and policy (93(c)).
Item (ii) uses significant unobservable inputs, so it is Level 3. Give fair value and level, a description of the technique and inputs, and quantitative information on significant unobservable inputs such as discount rate and cash flows (93(d)).
Add the reconciliation from opening to closing balance (93(e)), the unrealised P&L gain or loss on holdings at year end (93(f)), the valuation processes (93(g)) and narrative sensitivity, with the effect of reasonably possible alternative assumptions if significant (93(h)).
Present quantitative disclosures in a table (para 99).

Answer: The Level 1 shares need fair value, level and any Level 1/2 transfer information. The Level 3 stake needs, in addition, technique and inputs, quantitative unobservable inputs, a reconciliation, unrealised gains, valuation process and sensitivity disclosures.

Example 2

Kaveri Industries Ltd classifies a machine as held for sale under Ind AS 105. Its carrying amount is ₹80,00,000 and fair value less costs to sell is ₹72,00,000, determined using significant unobservable inputs. Identify the nature of the measurement and the disclosures required, including whether a Level 3 reconciliation is needed.

Show the solution

Fair value less costs to sell is lower than carrying amount, so the asset is written down to ₹72,00,000. The write-down is ₹80,00,000 − ₹72,00,000 = ₹8,00,000.
This measurement arises only in particular circumstances, so it is non-recurring, as in the standard's own example.
Disclose the fair value measurement at period end and, because it is non-recurring, the reasons for the measurement (93(a)). Disclose the level, which is Level 3 here (93(b)).
Disclose the technique and inputs, including quantitative information about significant unobservable inputs (93(d)), and the valuation processes (93(g)).
The reconciliation (93(e)), unrealised gains (93(f)) and sensitivity (93(h)) apply only to recurring Level 3 measurements, so they are not required.

Answer: This is a non-recurring Level 3 measurement. Disclose fair value of ₹72,00,000, the reason (held for sale, fair value less costs to sell below carrying amount), level, technique, inputs including quantitative unobservable inputs, and valuation processes. No Level 3 reconciliation is required.

Exam tips

In MCQs, the trap is usually the recurring or non-recurring label or the level. Check both before choosing a disclosure.
Learn the Level 3 recurring list in order: reconciliation, unrealised gains, valuation process, sensitivity. Questions often ask which item is missing.
In case-based answers, state the classification first (recurring or non-recurring, level), then list disclosures. This shows your reasoning and earns method marks.
Remember paragraph 97 for items carried at cost with fair value disclosed, and paragraph 6 exclusions. Both are favourite short-note points.
For written answers, present the reconciliation as a table with opening balance, P&L gains, OCI gains, purchases, sales, issues, settlements, transfers and closing balance.

Practice questions from Fair Value Measurement (Ind AS 113)

Disclosure Requirements under Ind AS 113 in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Disclosure Requirements under Ind AS 113: frequently asked questions

What is the difference between recurring and non-recurring fair value measurements?

Recurring measurements are required or permitted by other Ind ASs in the balance sheet at the end of each reporting period. Non-recurring ones arise only in particular circumstances, such as an asset held for sale at fair value less costs to sell when that is below carrying amount.

Is a Level 3 reconciliation needed for non-recurring measurements?

No. The reconciliation from opening to closing balances in paragraph 93(e) applies to recurring fair value measurements within Level 3. Non-recurring Level 3 measurements still need technique, inputs and valuation process disclosures.

Do I need to give quantitative unobservable input data if the entity just uses a prior transaction price?

Not if the entity does not develop quantitative unobservable inputs, for example when it uses prior transaction prices or third-party pricing without adjustment. However, it cannot ignore significant quantitative unobservable inputs that are reasonably available to it.

What disclosures apply if fair value is only disclosed, not recognised?

Paragraph 97 requires the level (93(b)), the description of technique and inputs where the item is Level 2 or 3 (93(d)), and highest-and-best-use information where relevant (93(i)). Quantitative disclosures on significant Level 3 unobservable inputs are not required, and the other Ind AS 113 disclosures need not be given.