Fair Value Hierarchy Classifier
IFRS 13 requires entities to classify the inputs used in fair value measurements into a three-level hierarchy that prioritises observable market data.
This tool helps you determine whether your valuation inputs are Level 1 (quoted prices in active markets for identical assets), Level 2 (observable inputs other than quoted prices), or Level 3 (unobservable inputs), based on the requirements in IFRS 13 paragraphs 72–90.
Can you obtain a quoted price for an identical asset or liability in an active market that you can access at the measurement date?
An active market is one where transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The price must be for an identical instrument — not a similar one. If your entity cannot access the market at the measurement date, it does not qualify even if that price exists (IFRS 13 §76).
How it works
You describe the inputs used in your valuation — whether prices are quoted in active markets, whether inputs are directly observable or derived from observable data, and whether significant unobservable adjustments are required.
The classifier applies the IFRS 13 hierarchy rules to assign each input to a level and determines the overall hierarchy classification for the measurement as a whole, per paragraph 73.