fair market value

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fair market value

n.
The price, as of a commodity or service, at which both buyers and sellers agree to do business.
References in periodicals archive ?
2%, which is surprisingly high; thus, the effect of level 3 gains on net income in the financial industry is nontrivial, and the concern about level 3 fair values appears justified.
For example, tin-sum of die fair values of" die individual instruments within a portfolio is not equal to the fair value of the net risk exposure.
Even if market prices are rapidly increasing or decreasing, fair values are more accurate and comparable across different entities.
In markets with limited activity, these institutions and services providers frequently utilize significant judgment and unobservable inputs in the determination of fair values.
As noted in ASC 350, goodwill cannot be measured directly, as it is a residual amount estimated by deducting the fair values of the acquired assets from the fair value of the reporting unit, after business combination accounting adjustments.
A major area of concern relates to inherent subjectivity and complexity in fair value valuation techniques and assumptions used when determining the fair values of assets and liabilities that are not traded in active and orderly financial markets, and that rely on valuation inputs that are not observable in the market.
In other words, the Board thought it would be a good idea for reporting entities to describe the range of fair values that might have been reported if the entity had used "reasonably possible alternative inputs" for Level 3 measurements and the use of those inputs would have had a significant impact on the fair value measurements.
Fair values, Income measurement, and Bank Analiysts' Risk and Valuation Judgments, The Accounting Review, vol 79, no.
FASB has raised the bar for disclosure required when the fair value option is in play so that financial statement users will be able to clearly understand the extent to which the option is utilized and how changes in fair values are being reflected in the financial statements.
As financial markets have become more transparent over the past several decades, it seems that fair values are more readily available and agreed upon for an increasing variety of assets and liabilities.
1) At this time, it does not expand the use of fair values in the primary financial statements.
Common notions of market efficiency suggest share prices should reflect all publicly available value-relevant information (including any value-relevant information in fair values of financial instruments), independent of whether market participants obtain the information from the financial statements, footnotes, of sources outside of the financial statements.