This case illustrates how to determine the fair value of a financial instrument.
Facts Entity A is considering how to determine the fair value of the following financial instruments:
(a) A share that is actively traded on a stock exchange
(b) A share for which no active market exists but for which quoted prices are available
(c) A loan asset originated by the entity
(d) A bond that is not actively traded but whose fair value can be determined by reference to quoted interest rates for government bonds
(e) A complex derivative that is tailor made for the entity
Required
In each of these cases, discuss whether fair value would be determined using a quoted market price or a valuation technique under IAS 39.