Fair Value Vs Market Value
The latest edition of International Valuation Standards (IVS 2007), clearly distinguishes between fair value, as defined in the IFRS, and market value, as defined in the IVS:
- So As the term is generally used, Fair Value can be clearly distinguished from Market Value. It requires the assessment of the price that is fair between two specific parties taking into account the respective advantages or disadvantages that each will gain from the transaction. Although Market Value may meet these criteria, this is not necessarily always the case. Fair Value is frequently used when undertaking due diligence in corporate transactions, where particular synergies between the two parties may mean that the price that is fair between them is higher than the price that might be obtainable on the wider market. On other words Special Value may be generated. Market Value requires this element of Special Value to be disregarded, but it forms part of the assessment of Fair Value.
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Famous quotes containing the words fair and/or market:
“We hold on to hopes for next year every year in western Dakota: hoping that droughts will end; hoping that our crops won’t be hailed out in the few rainstorms that come; hoping that it won’t be too windy on the day we harvest, blowing away five bushels an acre; hoping ... that if we get a fair crop, we’ll be able to get a fair price for it. Sometimes survival is the only blessing that the terrifying angel of the Plains bestows.”
—Kathleen Norris (b. 1947)
“Ae market night,
Tam had got planted unco right,
Fast by an ingle, bleezing finely,
Wi’ reaming swats that drank divinely;”
—Robert Burns (1759–1796)