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IND AS 113
Financial Reporting
In order to value fair value of share that is going to be listed soon ( Launch of IPO), we get to know about the GMP of the share price based on trading between market participants in unofficial market. Will it be considered as Level II hierarchy or it will not be considered reliable at all?
Answers (1)
Level II inputs are those that are observable inputs, other than quoted prices included within Level I, such as quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly. However, it's important to note that the reliability of the GMP as a fair value input may depend on several factors, such as the liquidity and transparency of the grey market, the credibility of the information source, and the characteristics of the IPO and the company being listed. As such, it's essential to exercise professional judgement when using the GMP as a fair value input and to supplement it with other reliable information sources as appropriate.
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