Market participant: Difference between revisions
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imported>Doug Williamson (Link with IFRS 13 page.) |
imported>Doug Williamson (Add headings.) |
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1. ''Financial reporting - fair value.'' | |||
For financial reporting and fair valuation purposes, market participants are strictly defined as: | For financial reporting and fair valuation purposes, market participants are strictly defined as: | ||
Buyers and sellers in the principal (or most advantageous) market for the asset or liability being fair valued that have all of the following characteristics: | Buyers and sellers in the principal (or most advantageous) market for the asset or liability being fair valued, that have all of the following characteristics: | ||
#They are independent of each other. | #They are independent of each other. | ||
#They are knowledgeable, having a reasonable understanding about the relevant asset or liability and the transaction using all available information, including information that might be obtained through due diligence efforts that are usual and customary. | #They are knowledgeable, having a reasonable understanding about the relevant asset or liability and the transaction using all available information, including information that might be obtained through due diligence efforts that are usual and customary. | ||
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#They are willing to enter into a transaction for the asset or liability, i.e. they are motivated but not forced or otherwise compelled to do so. | #They are willing to enter into a transaction for the asset or liability, i.e. they are motivated but not forced or otherwise compelled to do so. | ||
2. ''Markets.'' | |||
Defined more broadly, a 'market participant' is a company, a person or any other entity participating in a market. | Defined more broadly, a 'market participant' is a company, a person or any other entity participating in a market. | ||
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*[[Market maker]] | *[[Market maker]] | ||
*[[Market taker]] | *[[Market taker]] | ||
*[[Risk premium]] | |||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | |||
Latest revision as of 22:18, 13 August 2022
1. Financial reporting - fair value.
For financial reporting and fair valuation purposes, market participants are strictly defined as:
Buyers and sellers in the principal (or most advantageous) market for the asset or liability being fair valued, that have all of the following characteristics:
- They are independent of each other.
- They are knowledgeable, having a reasonable understanding about the relevant asset or liability and the transaction using all available information, including information that might be obtained through due diligence efforts that are usual and customary.
- They are able to enter into a transaction for the asset or liability.
- They are willing to enter into a transaction for the asset or liability, i.e. they are motivated but not forced or otherwise compelled to do so.
2. Markets.
Defined more broadly, a 'market participant' is a company, a person or any other entity participating in a market.
