Effective from 1 January 2013, the IASB issued the amended fair value measurement standard under IFRS on 12 May 2011, and this standard is called IFRS – 13 (Fair Value measurement). The most important thing about this standard was that it removed previous accounting standards under IAS 16,36,38,39,40 etc. The IFRS -13 provides a framework for providing the current or fair market value of assets and liabilities under a certain level of hierarchies (Livne and Markarian, 2018). There are three hierarchies of fair value measurement under IFRS -13 named level I, level II, and level III. These levels are explained below.
Level I: level I inputs are retried from unadjusted quoted market prices from the active and liquid market for identical assets. This level is most reliable due to its transparency and active market, and no interference from accountants (Ayres, Huang and Myring, 2017; Fargher and Zhang, 2014).
Level II: Level II inputs are retried from either liquid (active) or illiquid(inactive) markets for identical assets.
Level III: These inputs are most unreliable and rely heavily on the accountant's discretion, and are based on limited data. This level is the least reliable and transparent due to the absence of an active or inactive market.
