assume an entity acquires an asset at 31 december 20×7 for cu 1 000 that was categor 612333

Comparison of policies for recognising transfers [IFRS 13.IE66]

Assume an entity acquires an asset at 31 December 20X7 for CU 1,000 that was categorised in Level 2 of the fair value hierarchy at year end 20X7 and throughout Q1 20X8. At the end of Q1 20X8, the fair value of the asset based on market observable information was CU 950, and, as such, the asset was excluded from the Level 3 reconciliation. During Q2 20X8, observable market information was no longer available, so the entity categorised the asset in Level 3 at the end of Q2 20X8. During Q2 20X8, the fair value of the asset decreased from CU 950 to CU 750, with CU 50 of the change in fair value arising subsequent to the time when market observable information was no longer available.

Under the three approaches described above, the Level 3 reconciliation for Q2 20X8 would be as follows.