Assumptions about risk
BC149 In IFRS 13 inputs refer broadly to the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. The IASB decided that a necessary input to a valuation technique is an adjustment for risk because market participants would make such an adjustment when pricing an asset or a liability. Therefore, including an adjustment for risk ensures that the measurement reflects an exit price for the asset or liability, ie the price that would be received in an orderly transaction to sell an asset or paid in an orderly transaction to transfer the liability at the measurement date under current market conditions.
BC150 The IASB accepted that it might be difficult for an entity to quantify a risk adjustment in some cases, but concluded that this difficulty does not justify the exclusion of this input if market participants would take it into account. The exposure draft focused on the need to adjust for the risk inhe
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