IFRS 13 vs ASC 820: fair value

Because IFRS 13 and ASC 820 were developed together, many people assume fair value is identical under both. It nearly is, but the gaps affect fund investors, derivatives traders and private companies in particular. This guide sets out what the two share, compares the differences side by side, works through a day-one gain and a fund investment, and covers the disclosure differences and recent US changes.

By Awais Jameel, Chartered Accountant. Reviewed by Muhammad Bilal, Chartered Accountant. Updated . 6 minute read.

Short answer

IFRS 13 vs ASC 820 is mostly a story of convergence: the IASB and FASB wrote them together, so fair value is the same exit price in the principal or most advantageous market, measured with market participant assumptions, highest and best use and the same Level 1, 2 and 3 hierarchy. The differences are at the edges. US GAAP lets investments in funds be measured at net asset value as a practical expedient, outside the hierarchy; IFRS has no such expedient. US GAAP generally recognizes a day-one gain when fair value differs from the transaction price, while IFRS 9 defers it unless fair value is supported by a Level 1 price or only observable inputs. IFRS 13 requires a quantitative sensitivity analysis for Level 3 financial instruments and gives no relief to private companies, while US GAAP asks public companies for a narrative and exempts nonpublic entities from several Level 3 disclosures. US GAAP also has specific rules on contractual sale restrictions. In this guide's example, a $30,000 day-one gain is recognized at once under US GAAP and spread over 5 years under IFRS.

At a glance

Definition
Same exit price
Hierarchy
Same three levels
Funds at NAV
US GAAP only
Day-one gains
Deferred under IFRS
Level 3 sensitivity
Quantified under IFRS
Private cos
Relief under US GAAP
IFRS 13 vs ASC 820: fair valueDefinition: Same exit price; Hierarchy: Same three levels; Funds at NAV: US GAAP only; Day-one gains: Deferred under IFRS; Level 3 sensitivity: Quantified under IFRS; Private cos: Relief under US GAAP.KEY FACTS AT A GLANCEIFRS 13 vs ASC 820: fair valueDefinitionSame exit priceHierarchySame three levelsFunds at NAVUS GAAP onlyDay-one gainsDeferred under IFRSLevel 3 sensitivityQuantified under IFRSPrivate cosRelief under US GAAPTax BakersIFRS 13 vs ASC 820: fair valueDefinition: Same exit price; Hierarchy: Same three levels; Funds at NAV: US GAAP only; Day-one gains: Deferred under IFRS; Level 3 sensitivity: Quantified under IFRS; Private cos: Relief under US GAAP.KEY FACTS AT A GLANCEIFRS 13 vs ASC 820: fair valueDefinitionSame exit priceHierarchySame three levelsFunds at NAVUS GAAP onlyDay-one gainsDeferred under IFRSLevel 3 sensitivityQuantified under IFRSPrivate cosRelief under US GAAPTax Bakers
Key facts at a glance, as set out in this guide.

What do IFRS 13 and ASC 820 have in common?

The definition of fair value as an exit price at the measurement date; the principal market, or failing that the most advantageous market; market participant assumptions; highest and best use for non-financial assets; the inclusion of non-performance risk, including own credit, in liabilities; the market, income and cost approaches; and the three-level hierarchy based on the lowest significant input. A valuation prepared for one framework will usually satisfy the other. See IFRS 13 fair value measurement and ASC 820 fair value measurement.

IFRS 13 vs ASC 820: what are the differences?

IFRS 13 vs ASC 820 at a glanceIFRS 13 vs ASC 820 at a glanceTOPICIFRSUS GAAPSame exit price and hierarchyRequiredRequiredFunds at NAV, no levelNot allowedAllowedDay-one gain on model inputsNot allowedAllowedQuantified Level 3 sensitivityRequiredNot requiredPrivate company disclosure reliefNot allowedAllowed
The measurement is shared; the edges and the disclosures differ.
AreaIFRS 13 and IFRS 9ASC 820
Investments in fundsFair value; net asset value is a starting point that may need adjustingNet asset value per share may be used as a practical expedient, outside the hierarchy
Fair value differs from transaction price at day oneGain or loss recognized only if fair value is a Level 1 price or uses only observable inputs; otherwise deferredGain or loss generally recognized, unless another topic says otherwise
Level 3 sensitivityQuantitative effect of reasonably possible alternative inputs for financial instrumentsNarrative description of sensitivity, for public business entities
Level 3 roll-forward and other disclosuresRequired for all entities, unless a subsidiary applies IFRS 19Nonpublic entities exempt from the roll-forward and some other disclosures
Contractual sale restrictions on equity securitiesReflected only if the restriction is a characteristic of the asset that a buyer would take onNot reflected (ASU 2022-03), except by investment companies from 2028 (ASU 2026-03)

An example: a day-one gain

A company buys a long-dated derivative for $100,000. Its valuation model, which relies on a significant unobservable volatility input, gives a fair value of $130,000 on day one.

IFRS 9 and IFRS 13US GAAP
Initial carrying amount$100,000$130,000
Day-one gain in profit or lossNone$30,000
AfterwardsThe $30,000 is released as market participants would, often straight-line, about $6,000 a year over 5 yearsLater changes in fair value through earnings

The IFRS approach prevents profits from being booked on the strength of a model alone. US GAAP relies instead on disclosure of Level 3 measurements and the judgments behind them. See ASC 815 derivatives and hedging.

A company holds an interest in a private equity fund that reports a net asset value of $5.0 million at the year end, measured on investment company principles. Under US GAAP it may record $5.0 million using the practical expedient, without assigning a level, and disclose the redemption terms and unfunded commitments. Under IFRS 13 it must estimate fair value: NAV is a useful starting point, but if a buyer would pay less because the interest cannot be redeemed for years, the company adjusts, for example by 4% to $4.8 million, and classifies the measurement in the hierarchy, usually Level 3.

How do the disclosures differ?

IFRS 13 applies its disclosures to every reporting entity, including a quantitative Level 3 sensitivity for financial instruments, while US GAAP scales them: public business entities give the range and weighted average of significant unobservable inputs and a narrative on sensitivity, and nonpublic entities can omit the Level 3 roll-forward. From 2027, eligible IFRS subsidiaries can reduce their disclosures under IFRS 19. See IFRS 19 reduced disclosures and fair value levels in bank accounts.

Where to go next

See IFRS vs US GAAP key differences and IFRS 9 classification.

Keep going

Our free Excel models work through the examples in these guides, and the comparisons show where IFRS and US GAAP part ways. Every guide names the Chartered Accountant who wrote it and the one who reviewed it.

All IFRS vs US GAAP guides Free Excel models

Questions people ask

Is IFRS 13 the same as ASC 820?

Largely. They share the definition of fair value, the market rules, highest and best use and the hierarchy; they differ on the NAV practical expedient, day-one gains and disclosures.

Can IFRS reporters use net asset value as fair value?

Not as a practical expedient. NAV can be a starting point, but it must be adjusted if market participants would pay a different price.

Are day-one gains allowed under IFRS?

Only if fair value is evidenced by a Level 1 price or a valuation that uses only observable market data; otherwise the gain is deferred.

Do private companies get fair value disclosure relief?

Under US GAAP, nonpublic entities are exempt from several Level 3 disclosures; IFRS 13 has no such relief, though IFRS 19 reduces disclosures for eligible subsidiaries.

Sources

The standards, updates and other documents this guide draws on.

  1. IFRS Foundation: IFRS 13 Fair Value Measurement
  2. FASB Accounting Standards Codification: Topic 820, Fair Value Measurement
  3. Crowe: ASU 2026-03 changes investment company fair value measurements
  4. Deloitte DART: FASB issues ASU on fair value of investment companies' equity securities subject to contractual sale restrictions, September 2026

Rules and fees change. If you are reading this long after October 24, 2026, confirm the figures with the source before you rely on them.

IFRS 13IFRS 13 fair value measurement and the fair value hierarchyASC 820ASC 820 fair value measurementBankingFair value levels in bank accounts

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This guide is general information. It is not tax or legal advice for your situation.