KPMG Handbook: Fair value measurement

KPMG addresses frequently asked questions about applying the fair value measurement and disclosure guidance, highlighting the differences between US GAAP and IFRS Standards. This latest edition has been updated for newly effective accounting standards, and other standard-setting and practice developments.


  • ASC 820 and IFRS 13
  • All companies whose financial statements include fair value estimates, either in measuring the carrying amount of assets and/or liabilities or in note disclosures.

Fair value in a time of change

The principles of ASC 820, Fair Value Measurement and IFRS 13, Fair Value Measurement have been tested by COVID-19, but they remain steadfast. Preparers have been able to apply the principles to their unique circumstances and estimate fair value in an unpredictable and stressed environment.

Looking forward, the FASB has issued a proposed Accounting Standards Update (ASU), which would clarify that a contractual restriction on the sale of an equity security is an entity-specific characteristic and therefore should not be considered in measuring its fair value. The outcome of this project may have a significant impact on current practice under US GAAP, particularly for many investment companies that have historically considered certain contractual sale restrictions in measuring the fair value of an equity security.

And the IASB® Board is testing a new approach to developing disclosure requirements on IFRS 13. It aims to remove the ‘checklist’ perception of the IFRS Standards disclosure requirements and would require companies to apply more judgment. If the IASB Board continues down this path, the fair value disclosure requirements under US GAAP and IFRS Standards may become more divergent.

Outside of standard setting and within the valuation community itself, increasing attention is being paid to how climate-related risks (and opportunities) and reference rate reform affect the components of a valuation: cash flow projections, discount rates and other factors that have a direct impact on measuring certain assets and liabilities at fair value. We are monitoring developments in these areas as valuation practices evolve and recommend that you do the same.

We are pleased to share our insight and practical guidance in this edition of our Fair value measurement handbook. The publication will help you apply the principles of ASC 820 and IFRS 13 and understand the key differences between US GAAP and IFRS Standards.

This edition has been updated for:

  • ASU 2021-01, Reference rate reform (ASC 848): Scope.
  • ASU 2020-07, Presentation and disclosures by not-for-profit entities for contributed nonfinancial assets.
  • Other recent standard-setting and practice developments, and evolving interpretations.

Download from KPMG Financial Reporting View

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