Document ID: chunk:federal_register_of_legislation:F2024C00046:body:0:p29
Version: federal_register_of_legislation:F2024C00046
Segment Type: other
Provision Reference: 
Character Range: 72634–75576

are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (eg a forced liquidation or distress sale).
principal market            The market with the greatest volume and level of activity for the asset or liability.
risk premium                Compensation sought by risk-averse market participants for bearing the uncertainty inherent in the cash flows of an asset or a liability. Also referred to as a 'risk adjustment'.
transaction costs           The costs to sell an asset or transfer a liability in the principal (or most advantageous) market for the asset or liability that are directly attributable to the disposal of the asset or the transfer of the liability and meet both of the following criteria:
                            (a) They result directly from and are essential to that transaction.
                            (b) They would not have been incurred by the entity had the decision to sell the asset or transfer the liability not been made (similar to costs to sell, as defined in AASB 5).
transport costs             The costs that would be incurred to transport an asset from its current location to its principal (or most advantageous) market.
unit of account             The level at which an asset or a liability is aggregated or disaggregated in a Standard for recognition purposes.
unobservable inputs         Inputs for which market data are not available and that are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.

Appendix B
Application guidance
This appendix is an integral part of the Standard. It describes the application of paragraphs 1–99 and has the same authority as the other parts of the Standard.
B1 The judgements applied in different valuation situations may be different. This appendix describes the judgements that might apply when an entity measures fair value in different valuation situations.

The fair value measurement approach
B2 The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. A fair value measurement requires an entity to determine all the following:
(a) the particular asset or liability that is the subject of the measurement (consistently with its unit of account).
(b) for a non-financial asset, the valuation premise that is appropriate for the measurement (consistently with its highest and best use).
(c) the principal (or most advantageous) market for the asset or liability.
(d) the valuation technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset or liability and the level of the