Fair value measurement in IFRS financial statements and its impact on market perception and investment decisions

Abstract

IFRS 13 establishes a single framework for fair value measurement and expands disclosure requirements to enhance clarity and comparability. Firms must explain valuation techniques, inputs, and key assumptions. This thesis examines the impact of IFRS 13 on financial reporting quality and transparency by combining a literature review with an analysis of company practices across industries. The method traces how fair value rules affect (i) the valuation of assets and liabilities, (ii) financial statement presentation and related disclosures, and (iii) the information set available to stakeholders. Results indicate that IFRS 13 generally improves transparency and comparability, offering a clearer view of financial positions and strengthening confidence in reporting. At the same time, reliance on judgment, unobservable inputs, and complex valuation models can raise costs, add volatility, and reduce cross-firm consistency. The research question is: How does the application of fair value measurement in IFRS financial statements influence market perception and investment decisions across industries?