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 ?
Some stated that they employed independent institutions to measure the fair values, whereas others asserted that correctly estimating the fair value of assets and liabilities is management's ultimate responsibility.
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.
In connection with the recent financial and subsequent economic crisis, many opinions appeared blaming fair value measurements in financial statements to be one or even the main driver of the crisis.
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.
Goodwill impairment tests are performed either as part of the annual requirement under ASC 350 or upon the occurrence of what is known as a "triggering event"--a change in circumstances for the reporting unit that could create a situation where the fair value of the unit is below its carrying value.
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.
Although international regulating bodies aim to extend the practice of using fair value for the valuation of all the elements of the balance sheet, regardless of the companies' field of activity, valuation systems based on fair value are still a rather controversial issue.
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.
Statement 157 also requires that additional detailed disclosures be made about assumptions used in measuring fair values, which provides additional transparency to investors and other users of 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.
In contrast, Lipe (1998) and Maines and McDaniel (2000) argue that the judgments of analysts who specialize in firms for which fair values are central to core operations will routinely evaluate fair-value information wherever it is disclosed.