4 Application to financial planning 
The example of this section concerns the process of portfolio management of financial 
instruments. 
Lack of directly 
comparable market transactions 
Vee. 
=~ 
Estimation 
of Fair Value 
  
  
    
  
  
    
Complex interaction of 
factors (geography, volatility, 
credit risk, foreign currercy,, …) 
  
   
    
   
        
  
  
  
   
Adjust market data 
to reflect the potential 
Use publicly available info 
when deriving a valuation impact of complex factors 
Use reasonables 
assumptions and estimates Use appropriate 
methodology 
Simulate those of the parties v . 
In an arm’s-length transaction Take Into acc ount 
materiality considerations 
Take into account subsequent events 
Providing evidences of old estimates 
Abb. 3. The goals analysis of the Fair Value concept is the basis of the processes 
definitions. 
   
     
  
The management of unquoted financial instruments is especially difficult. In order 
to define the process model of unquoted financial instruments, a goal-oriented 
analysis of the process is done, as can be seen in Figure 3. This analysis helps to 
structure the content of international standards, such as the IAS 39 « Financial 
Instruments: Recognition and Measurement » [2], into a process model compliant to 
ISO/IEC 15504. This results into a description of the different processes useful for the 
management of a portfolio of unquoted financial instruments: the process of 
recognition, derecognition, impairment, measurement method selection, measurement 
method application (i.e. measurement), information collection and validation, ... are 
described through their goals they have to fulfill, instead of their operational or 
regulatory details. This will be the cornerstone of the Business Unit Manager to 
define the process performance indicators. For instance, he can define the 
effectiveness of the measurement process by assessing the number of subsequent 
events invalidating previous estimates. Note that the indicators that can be given by 
the ISO/IEC 15504 process models concerns both performance and operational risks. 
This implies that they can be used to evaluate the incentives given to the employees, 
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