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Business Definition for: fair market value
Dictionary of Accounting Terms
fair market value

amount that could be received on the sale of an asset when willing and financially capable buyers and sellers exist and there are no unusual circumstances such as liquidation, shortages, and emergencies.

See also liquidation value
Dictionary of Finance and Investment Terms
fair market value

price at which an asset or service passes from a willing seller to a willing buyer. It is assumed that both buyer and seller are rational and have a reasonable knowledge of relevant facts.

See also market
Dictionary of Banking Terms
fair market value

price at which an asset passes from a willing seller to a willing buyer, each having access to all the relevant facts and acting freely-frequently the basis for tax assessments and judicial awards.

Dictionary of Business Terms
fair market value

price at which an asset or service passes from a willing seller to a willing buyer. It is assumed that both buyer and seller are rational and have a reasonable knowledge of relevant facts.

See also market value
Dictionary of Real Estate Terms
fair market value

a term, generally used in property tax and condemnation legislation, meaning the market value of a property.

Example: Property taxes generally are assessed at some ratio of fair market value.

Example: When property is condemned for public use, the owner is entitled to be compensated at fair market value.

Related Terms:
liquidation value

cash price or other consideration that can be received in a forced-sale of assets, such as that occurring when a firm is in the process of going out of business. Typically, the liquidation value is less than what could be received from selling assets in the ordinary course of business.

market

  1. public place where products or services are bought and sold, directly or through intermediaries. Also called marketplace.
  2. aggregate of people with the present or potential ability and desire to purchase a product or service; equivalent to demand.
  3. securities markets in the aggregate, or the New York Stock Exchange in particular.
  4. short for market value, the value of an asset based on the price it would command on the open market, usually as determined by the market price at which similar assets have recently been bought and sold.
  5. as a verb, to sell. See also marketing.

market value

  1. typically, price at which an item could be sold.
  2. as used in the lower of cost or market rule for inventory valuation, replacement cost subject to ceiling and floor limits.
    See also fair market value.

Referring Terms:
cash equivalent value
justified price
justified price
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 Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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