Abstract
Although the IFRS 13 standard has been effective for more than 4 years, there is virtually no practical research on this topic. Therefore, this paper focuses on reporting of fair value measurement under IFRS 13 in the Czech Republic. Firstly, the author identifies and describes the theoretical basis of IFRS 13 with a relevant literature review of the conducted research. Subsequently, the actual empirical research is presented on a sample of companies from the Czech Republic. The author reaches a conclusion that in some cases, companies in the Czech Republic fail to report compulsory information, as required by the IFRS 13 standard. Moreover, the empirical research has revealed that the proportion of the fair value measurement within fair value hierarchy is approximately one third for each of the three levels, and it does not change over time.
Highlights
Fair value measurement is presently one of the hottest topics in the accounting field
Note: *One company uses only Level 1 of the fair value hierarchy and it is not obliged to report information regarding the Question 3 – this company was included in the answer category “Yes”
It is important to emphasize that this process is compulsory, which means that nearly a quarter of the companies does not respect the IFRS 13 requirements
Summary
Fair value measurement is presently one of the hottest topics in the accounting field. There is a major pressure on companies to report the true and fair value of assets and liabilities in their financial statements. Whether fair value measurement is an obstacle or a benefit was nicely explained by Žárová (2008). The first part of the paper presents a clear evolution of the fair value definition. It has varied over the time quite often. The last definition is precisely stated in the IFRS 13 standard issued in May 2011 and applies to annual periods beginning on or after 1 January 2013. A thorough literature review on the topic of fair value and related disclosures was compiled
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