Enquiry:

The Committee interpretation is requested on the following lines:

Quote : At any subsequent date, if an entity is able to estimate a reliable fair value for shares by any  method, the gain will be recognized according to IAS 39. Un Quote

By word subsequent, our client has an interpretation as if today market conditions.

Whereas keeping in view paragraph 15 of ICAP opinion on subject, we differently interpret that the subsequent date is the date by which the blocked shares will be sold out to strategic investor or general public not before and active market is developed for these shares not earlier.

Paragraph 15 of the ICAP opinion says that:

Quote : Any subsequent measurement of the shares and / or TREC would only be possible where their reliable fair values can be measured. This would most likely happen when the blocked shares are sold to the strategic investor or to the general public through an IPO and an active market develops for the TREC. Un Quote

Please guide on our understanding.

Opinion:

The Committee considered your query and would again like to reproduce para 15 of the  opinion:

“Any subsequent measurement of the shares and / or TREC would only be possible where their reliable fair values can be measured. This would most likely happen when the blocked shares are sold to the strategic investor or to the general public through an IPO and an active market develops for the TREC”.

The Committee in its opinion had no intention to time bound the subsequent measurement of fair value. An entity can determine the reliable fair value through an appropriate price finding mechanism any time after initial recognition.

(August 29, 2013)