Fair value


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Fair value

In the context of futures, the equilibrium price for futures contracts. Also called the theoretical futures price, which equals the spot price continuously compounded at the cost of carry rate for some time interval. More generally, fair value for any asset simply refers to the perception that it is neither underpriced (too cheap) nor overpriced (too expensive).

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.
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Main changes to a principle or requirement for measuring lair value or disclosing fair value information relate to financial instruments managed within a portfolio: the use of premiums or discounts; and additional disclosures.
Fairly aligned: the continuing convergence of U.S. GAAP and IFRS
Because the fair value of a GIK is determined when it is contributed to an NFP, it is important to determine when a contribution occurs.
Gifts in kind: what are they worth? How to avoid the pitfalls of GIK valuation
Additionally, the methodology for measuring fair value is nearly identical under both sets of standards, and fair value disclosure requirements are largely the same.
A world of fair value: the FASB and the IASB have issued converged standards on fair value, and this is changing both U.S. GAAP and IFRS
When the indemnifying party (or guarantor) is not legally obligated (under the tax law) to pay taxes covered by an indemnification agreement, FIN 45 may apply to require the guarantor to recognize a liability for the fair value of the guarantee at inception.
Tax considerations: the use of fair-value accounting in the U.S. has accelerated in recent years as a means of enhancing financial statement quality, transparency and relevance. With the trend toward global convergence--where fair-value measurement is even more prevalent--here are highlights of certain tax considerations
If markets were liquid and transparent for all assets and liabilities, fair value accounting clearly would be reliable information useful in the decisionmaking process.
Fair value accounting
It provides an understanding of the topic, concrete practical guidance, and support for those who wish to implement fair value measurements and fair value accounting.
Implementing Fair Value Accounting
Consideration that includes share-based payment awards resulting from the acquirer's obligation to replace share-based payment awards of the acquiree is measured at the fair value of the acquirer's replacement award.
Fair value and business combinations
The first quarter of 2008 is likely to usher in the first significant wave of financial statements from companies that have adopted FASB's new fair value option for financial assets and liabilities.
The finer points of fair value: FASB 159 opens up options
Fair value is determined to be a market-based measurement, and the standard sets up the hierarchy for determining the fair value based on "observable" inputs (ready markets, etc.
FEI CEO's 2007 Top 10 Financial Reporting Challenges
Opinion is split on whether fair value will be the chosen standard.
Survey: Canada and U.S. life industry expected to adopt accounting standard
Company A designates the swap as a fair value hedge of its fixed-rate asset.
Identical Companies, Different Financial Statements
Since fair value accounting methods and assumptions will vary," said Tim E.
STUDY RAISES DOUBTS ON NEW ACCOUNTING STANDARDS

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