Paragraph 31B Methods for determining fair valueF1

(1)

The fair value of a financial instrument is its value determined in accordance with this paragraph.

(2)

If a reliable market can readily be identified for the financial instrument, its fair value is to be determined by reference to its market value.

(3)

If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is to be determined by reference to the market value of its components or of the similar instrument.

(4)

If neither sub-paragraph (2) nor (3) apply, the fair value of the financial instrument is to be a value resulting from generally accepted valuation models and techniques.

(5)

Any valuation models and techniques used for the purposes of sub-paragraph (4) must ensure a reasonable approximation of the market value.

Annotations

Textual amendments

F1: Sch. 7 Pt. 6A inserted (31.12.2004 with application in accordance with reg. 1(2) of the amending S.I.) by The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 2004 (S.I. 2004/3199), regs. 1(1), 8(3)