What are IFRS regulations
The essential IFRS regulations for the valuation of financial statement items can be found in the framework, which merely formulates the principles for the valuation of all assets and liabilities. Isolated references to the principles of evaluation can be found at various points in the framework concept.
Clear evaluation rules in the framework concept
- Clear evaluation rules are given in the framework for the following values:
- Historical purchase or Manufacturing costs
- Daily value
- Realizable value / settlement amount
- Present value
In addition to these four benchmarks that distinguish the framework concept, further benchmarks are used in individual IFRS standards:
- Continued acquisition cost - or production costs (IAS 16),
- Net realizable value (IAS 2),
- Net sales price (e.g. IAS 35),
- Net selling price (e.g. IAS 36),
- Value in use (e.g. IAS 36),
- Realizable amount (e.g. IAS 36),
- Fair value (e.g. IAS 16) and
- Market value (e.g. IAS 32).
The last-mentioned value standards always take precedence over the four basic evaluation standards with regard to their specific binding force. However, the result may not contradict the basic evaluation standards.