Fair Value Measurement
What Is Fair Value?
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value reflects current market conditions rather than historical cost.
Fair value measurements emphasize market-based assumptions rather than entity-specific estimates whenever observable market information is available.
Note
Fair value is an exit price—the amount received to sell an asset or paid to transfer a liability.
Summary
Fair value measures current market-based values rather than historical acquisition costs.