• Fair value is the estimated price at which an asset is bought or sold when both the buyer and the seller freely agree on a price.

  • Individuals and legal entities can compare current market value, growth potential and replacement cost to determine the fair value of an asset.
  • Fair value is a measure of the value of an asset, while market value is the market price of an asset.
  • Fair value accounting is the practice of measuring an entity’s liabilities and assets at their current market value.