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CMA Final · Corporate Financial Reporting · Valuation of Shares (including Determination of Goodwill)

Kaveri Pharma is valuing its unquoted equity investment using a fair value approach. Which of the following measurements falls outside the measurement and disclosure requirements of Ind AS 113 because it only resembles fair value?

Value in use under Ind AS 36 is outside the scope of Ind AS 113, because the standard excludes measurements that resemble fair value but are not fair value, such as net realisable value under Ind AS 2 and value in use under Ind AS 36.

  1. AValue in use of a cash-generating unit under Ind AS 36Correct
  2. BPrice of shares traded on the National Stock Exchange
  3. CFair value of a derivative held for trading
  4. DFair value of an investment property for disclosure

Explanation

Ind AS 113 scope excludes measurements that have some similarities to fair value but are not fair value, such as net realisable value under Ind AS 2 and value in use under Ind AS 36. The other three are fair value measurements within scope. Hence only value in use is outside it.

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