Document ID: chunk:federal_register_of_legislation:F2024C00046:body:0:p45
Version: federal_register_of_legislation:F2024C00046
Segment Type: other
Provision Reference: 
Character Range: 113936–116719

indication that further analysis is needed.
B41 Even when there has been a significant decrease in the volume or level of activity for the asset or liability, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (ie not a forced liquidation or distress sale) between market participants at the measurement date under current market conditions.
B42 Estimating the price at which market participants would be willing to enter into a transaction at the measurement date under current market conditions if there has been a significant decrease in the volume or level of activity for the asset or liability depends on the facts and circumstances at the measurement date and requires judgement. An entity's intention to hold the asset or to settle or otherwise fulfil the liability is not relevant when measuring fair value because fair value is a market-based measurement, not an entity-specific measurement.

Identifying transactions that are not orderly
B43 The determination of whether a transaction is orderly (or is not orderly) is more difficult if there has been a significant decrease in the volume or level of activity for the asset or liability in relation to normal market activity for the asset or liability (or similar assets or liabilities). In such circumstances it is not appropriate to conclude that all transactions in that market are not orderly (ie forced liquidations or distress sales). Circumstances that may indicate that a transaction is not orderly include the following:
(a) There was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions.
(b) There was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant.
(c) The seller is in or near bankruptcy or receivership (ie the seller is distressed).
(d) The seller was required to sell to meet regulatory or legal requirements (ie the seller was forced).
(e) The transaction price is an outlier when compared with other recent transactions for the same or a similar asset or liability.
An entity shall evaluate the circumstances to determine whether, on the weight of the evidence available, the transaction is orderly.
B44 An entity shall consider all the following when measuring fair value or estimating market risk premiums:
(a) If the evidence indicates that a transaction is not orderly, an entity shall place little, if any, weight (compared with other indications of fair value) on that transaction price.
(b) If the evidence indicates that a