The Financial Reporting Council (FRC) has warned companies that they will need to make better disclosures about fair value exposure in future to make them clearer and more transparent.

The latest FRC thematic review of IFRS 13 Fair Value Measurement focused on the accounting treatment of fair value reporting.

One of the overriding issues stressed that companies should use fair value measurements based on market participants’ rather than the company’s own assumptions.

Companies should consider using specialist third party advice when valuing a material item and where there is no internal expertise.