Define: Fair Value

UK Accounting Glossary

Definition: Fair Value


Quick Summary of Fair Value


The amount at which an asset or liability could be exchanged in an arm’s-length transaction between a willing buyer and a willing seller.



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Full Definition of Fair Value


Fair value is a market price that both the buyer and the seller, neither under duress, will accept for the good or service they’re transacting.

Fair value is the price at which supply and demand meet. Fair value not only assumes that neither the buyer nor the seller are in any way forced to make the transaction; fair value also assumes that both the buyer and the seller have reasonable knowledge of relevant facts. Fair value reflects the price at which a seller is willing to part with his item in exchange for money and a buyer is willing to part with her money in exchange for the item. Fair value does not necessarily reflect an item’s intrinsic worth (e.g. the value of the materials used to make the item). An item’s fair value is based on a comparable market analysis (in other words, an item’s fair value is determined by the price at which similar items recently sold for).


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Synonyms For Fair Value


at fair value, fair valuation, actual value, marketable value, market values


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https://payrollheaven.com/define/fair-value/
Modern Language Association (MLA):
Fair Value. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 29, 2020 https://payrollheaven.com/define/fair-value/.
Chicago Manual of Style (CMS):
Fair Value. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/fair-value/ (accessed: February 29, 2020).
American Psychological Association (APA):
Fair Value. PayrollHeaven.com. Retrieved February 29, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/fair-value/

Definition Sources


Definitions for Fair Value are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd December 2018.