BC46 IFRS 13 states that a fair value measurement takes into account the characteristics of the asset or liability, eg the condition and location of the asset and restrictions, if any, on its sale or use. Restrictions on the sale or use of an asset affect its fair value if market participants would take the restrictions into account when pricing the asset at the measurement date. That is consistent with the fair value measurement guidance already in IFRSs. For example:

(a) IAS 40 stated that an entity should identify any differences between the property being measured at fair value and similar properties for which observable market prices are available and make the appropriate adjustments; and

(b) IAS 41 referred to measuring the fair value of a biological asset or agricultural produce in its present location and condition.

BC47 The IASB concluded that IFRS 13 should describe how to measure fair value, not what is being measured at fair value. Other IFRSs specify whether a fair value measurement considers an individual asset or liability or a group of assets or liabilities (ie the unit of account). For example:

(a) IAS 36 states that an entity should measure the fair value less costs of disposal for a cash‑generating unit when assessing its recoverable amount.