An entity holds an equity instrument for which sale is legally restricted for a specified period….

Restrictions on assets [IFRS 13.IE28]

An entity holds an equity instrument for which sale is legally restricted for a specified period. The restriction is a characteristic of the instrument that would transfer to market participants. As such, the fair value of the instrument would be measured based on the quoted price for an otherwise identical unrestricted equity instrument that trades in a public market, adjusted for the effect of the restriction. The adjustment would reflect the discount market participants would demand for the risk relating to the inability to access a public market for the instrument for the specified period. The adjustment would vary depending on:

  • The nature and duration of the restriction;
  • The extent to which buyers are limited by the restriction; and
  • Qualitative and quantitative factors specific to both the instrument and the issuer.

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