Fair value is a measure of an asset or liability at its current market price. It is an estimate of the price that would be received from an arm’s length transaction between willing buyers and sellers.

Fair value is used to:

• Account for assets and liabilities that do not have a quoted market price.
• Disclose the fair value of investments.
• Compare financial statements to other companies.

Fair value can be measured using:

• Market data.
• Discounted cash flows.
• Other valuation techniques.

The fair value of an asset or liability is:

• The highest price that a willing buyer would pay to acquire the asset or liability.
• The lowest price that a willing seller would accept to sell the asset or liability.

The fair value of an asset is:

• The price that a willing buyer would pay for the asset.
• The price that a willing buyer would pay to acquire the asset in an arm’s length transaction.

The fair value of a liability is:

• The price that a willing seller would accept to pay off the liability.
• The price that a willing seller would accept to sell the liability in an arm’s length transaction.