fair market value

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Fair Market Value

A subjective estimate of what a willing buyer would pay a willing seller for a given asset, assuming both have a reasonable knowledge of the asset's worth. Fair market value is important in both law and accounting. In the former, it is often used in assessing damages as the result of a lawsuit. In the latter, determining the fair market value of an asset (e.g. after depreciation) is important to determining the amount of tax owed on it.

fair market value

The price at which a buyer and a seller willingly consummate a trade.

Fair market value.

Fair market value is the price you would have to pay to buy a particular asset or service on the open market.

The concept of fair market value assumes that both buyer and seller are reasonably well informed of market conditions. It also assumes that neither is under undue pressure to buy or sell, and that neither intends to defraud the other.

fair market value

The amount that a willing buyer would pay a willing seller for property after reasonable exposure to the marketplace.

Fair Market Value (FMV)

The amount at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell and both having reasonable knowledge of the relevant facts.
References in periodicals archive ?
From an IFRS perspective, IFRS 13 provides significant fair value guidance as, for the first time there is a precise definition of fair value and a single source of fair value measurement and disclosure requirements (U.
While the changes made to fair value accounting may seem like yesterday's news, it is still important to maintain a strong control environment and robust documentation over the valuation of financial instruments in order to ensure reliable and transparent accounting.
The authors indicate that the latitude afforded entities to assign fair values to assets and liabilities means that the most important "principles" in mark-to-market accounting are the ethical principles of preparers and auditors who estimate and attest to the fair values reported in financial statements.
Few accounting issues have generated as much controversy as the use of fair value measurements, which are in some cases required and in other cases permitted under U.
FASB has raised the bar for disclosure required when the fair value option is in play so that investors, analysts and other financial statement users will be able to clearly understand the extent to which the option is used and how changes in fair values are reflected in the financial statements.
For example, changes in fair values of securities portfolios can arise from movements in interest rates, foreign-currency rates, and credit quality, as well as purchases and sales from the portfolio.
Since fair value accounting methods and assumptions will vary," said Tim E.
Specifically, there are two major concerns: first, the earnings volatility the business combination accounting procedures create, and second, obtaining timely and accurate fair value measurements for assets acquired and liabilities assumed in the business combination.
This has been accentuated by the recent meltdown in the credit and subprime markets, making the determination of fair values for certain asset-backed securities extremely difficult to determine because there has been a disconnect between supply and demand for subprime asset-backed securities.
The AICPA recently issued two Interpretations of Statements on Auditing Standards regarding auditing fair values.