Fair Market Value

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Fair Market Value

The amount for which real property or Personal Property would be sold in a voluntary transaction between a buyer and seller, neither of whom is under any obligation to buy or sell.

The customary test of fair market value in real estate transactions is the price that a buyer is willing, but is not under any duty, to pay for a particular property to an owner who is willing, but not obligated, to sell.

Various factors can have an effect on the fair market value of real estate, including the uses to which the property has been adapted and the demand for similar property.

Fair market value can also be referred to as fair cash value or fair value.

fair market value

n. the amount for which property would sell on the open market if put up for sale. This is distinguished from "replacement value," which is the cost of duplicating the property. Real estate appraisers will use "comparable" sales of similar property in the area to determine market value, adding or deducting amounts based on differences in quality and size of the property. (See: market value, appraiser)

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The drop in valuation of level 3 assets indicates that investors are concerned about the reliability of management's estimates of their fair values.
Fair value accounting and reliability: the problem with level 3 estimates
201 1-04, fair Value Measurement (Topic 820); Amendments to intendments to Achieve Common Fair value Measurement and Disclosure Requirements in US.
Fairly aligned: the continuing convergence of U.S. GAAP and IFRS
In this connection, it is necessary to decide whether only one fair value for the element exists or if it is possible that several fair values can exist for the particular item.
The role of fair value measurement in the recent financial crunch
The reliance on a sole source exposes management to the risk of unreasonable fair values.
Documenting fair value determinations in an uncertain economy
As in typical business combination accounting, the fair values of tangible and intangible assets are estimated.
Transaction structures matter in goodwill impairment testing: corporate finance departments need to consider hypothetical transaction structures for each reporting unit early in the process, since they can affect whether goodwill is impaired and the extent to which it is
Casabona and Victoria Shoaf discuss the impact of the increasing use of fair value accounting and reporting in financial statements and the difficulties experienced in applying fair value guidance in measuring the fair values of certain assets and liabilities, especially for investments traded in inactive markets for which reliable observable market valuation inputs are not readily available.
From the special issue editors: fair value measurements and reporting developments, and the continued movement toward International Financial Reporting Standards
New disclosure requirements from the FASB are intended to provide financial-statement users with greater transparency about the way reporting entities apply the fair value measurement provisions of U.
Another step along the path to transparency
Lately, under the pressure of investors and with help from the organizations involved in regulating accounting activities, we have witnessed a change of the traditional accounting model based on historical cost, which has turned into an accounting model based on the fair value, which would in turn meet the requirements for maximizing share value" (Ionascu, 2003).
Empirical study on the prospects of applying fair value accounting in Romania
157, which maps out the hierarchy that provides direction on how fair values are determined.
The finer points of fair value: FASB 159 opens up options
Ironically, with this increased information comes increased variability in methodologies and assumptions used to estimate and calculate fair values.
Fair-value accounting: hitch 'em up!
Fair values reflect point estimates and by themselves do not result in transparent financial statements.
Fair value accounting
Archival research on the value- and risk-relevance of fair values provides only mixed support for these normative predictions.
Fair values, income measurement, and bank analysts' risk and valuation judgments

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