FAIR VALUE MEASUREMENT AND LIMITATIONS IN APPLYING IN UZBEKISTAN

Аннотация

The article examines theoretical and practical aspects of fair value measurement in accounting. Particular attention is paid to the application of International Financial Reporting Standards 13 “Fair value measurement” in the context of the Republic of Uzbekistan. Key limitations and problems are identified: lack of active markets, limited number of specialists and shortcomings of the regulatory framework. Proposals are given for improving the methods of measurement and regulatory support. Key words: fair value, IFRS 13, present value, Uzbekistan, asset valuation, market value, limitations. Introduction. With the transition of the Republic of Uzbekistan to International Financial Reporting Standards (IFRS), the role of fair value measurement in the accounting system is increasing. However, the application of this measurement is accompanied by a number of limitations associated with the insufficient maturity of the national financial market, a shortage ofqualified appraisers and gaps inlegislations. Fair value is recognized in international practice as a key element in the assessment of assets andliabilities, especially in relation to financial instruments. Fair value is a fundamental concept enshrined in IFRS 13“Fair valuemeasurement”. Fair value does not depend on the individual views of a particular company or accountant. It is formed on the basis of information available in active markets and should reflect what an independent market participant would pay fora given asset orliabilityunder current conditions. The purpose of this article is to provide a brief description of the concept of fair value, describe the approaches used to measure it and identify the obstacles that exist in the Republic of Uzbekistanto its effectiveapplication inrelation to financial investments. Methods. The methodological basis of this study is based on the use of a set of analytical, comparative and applied methods aimed at identifying institutional, regulatory and practical factors that impede an objective and reliable assessment of the fair value of financial investmentsin theRepublicofUzbekistan. The key theoretical reference is International Financial Reporting Standard (IFRS) 13 «Fair Value Measurement», which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.1 Accordingtothis standard, three levels ofinput datahierarchy are considered withinthe study:  Level 1 inputs are quoted prices (unadjusted) in active markets for assets or liabilities identical to those being measured. An active market is one in which transactions in identical assets or liabilities occur regularly between independent parties, and prices are publicly available and reflect current market values. Such markets are characterized by a sufficient number of buyers and sellers, which ensures liquidity and reliability of the prices obtained. In 1IFRS13“FairValueMeasurement” 180 Volume 4, issue 5, 2025 the context of fair value assessment, an active market allows quoted prices to be used as an objectivereference, withoutthe needto resort to modelsor professional judgment.  Level 2 inputs are inputs that are not quoted prices included in Level 1 and that are directly or indirectly observable for the asset or liability. These are likely to be prices quoted for similar assets or liabilities in active markets or supported by market data. For example, interest rates, credit spreads or yield curves. Adjustments may be necessary for Level 2 inputs and, if the adjustmentis significant, thefair value may need tobe categorised as Level 3.  Level 3 inputs are unobservable inputs. These inputs should be used only when it is not possibleto use Level 1 or 2 inputs. An entity should maximize the use of appropriate observable inputsand minimizetheuseof unobservable inputs. In the context of Uzbekistan, the main emphasis is placed on Level 2 and especially Level 3, as the country's capital market does not provide sufficient liquidity and transparency for widespread useofLevel 1assessments. To determine the deviations between international practice and the national situation, a comparative analysis method was used, which allowed:  Compare the requirements of IFRS and National Accounting Standards (NAS) in terms offairvalue assessment;  To assess the compliance of the legislative and institutional framework of Uzbekistan withinternational standards;  To identify practical differences in the use of valuation methods in companies with different levels ofaccess tothe capital market. Thesecondary dataanalysis is based onthe studyof thefollowing sources:  Reports of the Agency for the Development of the Stock Market of the Republic of Uzbekistan;  Annual reports of companies that haveswitched toIFRS;  Publications ofscientific journals and dissertations;  Materials of audit and appraisal companies;  Datafrom theUnified Portal of CorporateRepor