Report: AASB 13

Table of Contents

  • Introduction
  • Part A
  • Question 1
  • Question 2
  • Question 3
  • References


Part A

Question 1

a)  As per the regulations in the AASB 13 the entity is not required to identify specific market participants. The entity, on the other hand as per the regulation can identify the features that make specific market participants unique from other market participants (Dunbar & Laing, 2017) AASB 13 report sample. In doing so the regulations recommends to consider the following factors given below:

  • ● Assets or liability of the market participants
  • Identify the most suitable market for the assets and liabilities
  • Determine the market participants in a specific market in order to conduct transaction

In this regard IFRS 13 states that the valuation of the assets to be sold or liabilities to be transferred need valuation under the recommended approach such as market, cost and income approach. 

b) In the process of determining the assumption that market participants would undertake as per the AASB 13 is the measurement of the fair value of assets and liabilities for selling and transfer purpose the entity shall consider the assumption made by the market participants. As the AASB 13 of fair value measurement further states that the entity shall consider the market participant will assume keeping in mind its economic benefits and interest. In this regard, the IFRS 13 of the fair value measurement regulation prescribes the usage of relevant valuation method, which needs to be in accordance to the information and data available for determining the price assumption made by the market participants (Abbott & Tan‐Kantor, 2017). Subsequently, it has been noted from the IFRS 13 regulation that the transactions regarding the selling of assets and transfer of liability needs to be conducted under the present condition of the market.

c) In the event where an entity refuses to make transactions at a price provided by the market participants the price may not be disregarded. As the AASB 13 has implemented the aspect where the entity can measure the fair value of the asset and liability apart from the specific market at times when the fair value does not represent the correct price in a particular market. Moreover, it has been further noted that in the absence of observable market in order to obtain information regarding pricing the entity by considering the assumption of market participants creates a base in order to determine the  relevant price for selling or transfer of asset and liability respectively. Since the regulation recommends using of most profitable market for the sale and transfer of the assets and liabilities to an entity, thus, it can be said that in the event of disagreement reading the fair value price the price cannot be disregarded due to the difference in value in different market.

Question 2

Problems associated with basing depreciation expense with the historical cost primarily leads to unspecific valuation of the assets as it does not consider the current value of assets. Moreover, in the method of historical costing does not provide adequate scope for adding the depreciation cost as the depreciation is added based on the historical expense of the asset avoiding the cost of purchase of the asset (Kenyon, 2015) AASB 13 report sample . In the same context it can be further added that the depreciation costing method is much more rigid as the historical cost is used to compare and value the asset which significantly reduces the value of the asset.

The reason managers opts for the cost model is due to the fact that cost model approach is flexible in nature as it allows to adapt in accordance with the needs and requirements of the entity. Moreover, with the application of cost model the managers can implement effective monitoring practice, which allows determining the individual productivity of employees in the operations. 


This is a sample business report of AASB 13  From our experts get your report right now

Question 3

Under the principles set in IAS 36 it has been stated that in the event of where CUG has an indication of being impaired then it can be considered that the carrying amount of the CPU has increased the amount of recovery. In such cases it has been recommended for identifying the CGU of an asset an associate the same with assets it belongs. Moreover, it can be further added in this context the CGU needs to be reduced based on their carrying amount. Accordingly if the recoverable amount has not been identified regarding an asset then the recoverable amount of the CGU can be considered (Wu, 2018).

In order to identify the CPU in respect to SafeRide Bus Company the management as per the standards set under the IAS 30 needs to effectively monitor the operating activities of the entity and its decision making process for the continuation and disposal of its operations or assets. Moreover, the IAS regulations further require full disclosure of the CGU related to the goodwill individually or with a group. The valuation of the CGU needs to be as per the recommended methods under IAS 36.  


Abbott, M., & Tan‐Kantor, A. (2017). Fair Value Measurement and Mandated Accounting Changes: The Case of the Victorian Rail Track Corporation. From

Dunbar, K., & Laing, G. K. (2017). Deconstructing the Accounting Standard AASB 13 Fair Value: Exit vs Entry Price for Assets. Journal of New Business Ideas & Trends, 12-19. From

Kenyon, R. (2015). Accounting for KVA under IFRS 13. From

Wu, G. S.-h. (2018). The Impact of IAS 36 on the Determinants of Purchase-Price Allocation to Goodwill under IFRS 3: Reporting Incentives and Corporate Governance. From

This is a sample  report

 Of AASB 13 From our experts get your report right now

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