Accounting, Reporting & Tax
Fair Value Measurement in Shipping
Summary
Fair value reflects an orderly transaction between market participants at the measurement date under IFRS 13 when another standard requires or permits it.
Why this matters in ship finance
Observed vessel transactions can be sparse, so valuation uncertainty and input classification become important.
The concept
IFRS 13 provides a measurement framework, not a mandate to carry every vessel at fair value. Different standards determine when fair value is needed.
How it is used in practice
Document comparable sales, asset condition, charter attachments, valuation date, input hierarchy, adjustments and sensitivity.
Practical issues
A broker desktop appraisal is evidence, not automatically an IFRS 13-compliant valuation. Fair value differs from forced-sale or subjective investment value.
How ShipFinance.ai uses this concept
Provide valuation-method documentation and an uncertainty range with sources of inputs.
Key takeaways
- IFRS 13 gives a measurement framework, not a universal fair-value mandate.
- Use market-participant inputs and disclose uncertainty.
- Do not equate fair value with forced-sale value.