Level 1 means quoted prices in active markets; Level 2 other directly or indirectly observable inputs; Level 3 unobservable inputs such as the entity's own cash flow forecasts. Level 3 measurements require more disclosure and audit work.
Source: TFRS 13
Related terms
Fair valueThe price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.ValuationEstimating the monetary value of a company, share, asset or liability at a specific date and for a specific purpose.Sensitivity analysisMeasuring the effect of changes in key assumptions on the outcome.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: October 31, 2026 · This definition is for general information only.