BC5 As part of the annual improvements project begun in 2007, the Board reconsidered whether it is appropriate to require a pre‑tax discount rate in paragraph 20 when measuring fair value. [IFRS 13 Fair Value Measurement, issued in May 2011, defines fair value and contains the requirements for measuring fair value.] The Board noted that a fair value measurement should take into account the attributes, including tax attributes, that a market participant would consider when pricing an asset or liability.
BC6 The Board noted that a willing buyer would factor into the amount that it would be willing to pay the seller to acquire an asset (or would receive to assume a liability) all incremental cash flows that would benefit that buyer. Those incremental cash flows would be reduced by expected income tax payments using appropriate tax rates (ie the tax rate of a market participant buyer). Accordingly, fair value takes into account future income taxes that a market participant purchasing the
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