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Accounting. In accounting, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. The derivation takes into account such objective factors as the costs associated with production or replacement, market conditions and matters of supply and demand.
t. e. Mark-to-market ( MTM or M2M) or fair value accounting is accounting for the "fair value" of an asset or liability based on the current market price, or the price for similar assets and liabilities, or based on another objectively assessed "fair" value. [ 1] Fair value accounting has been a part of Generally Accepted Accounting Principles ...
Substance over form is an accounting principle used "to ensure that financial statements give a complete, relevant, and accurate picture of transactions and events". If an entity practices the 'substance over form' concept, then the financial statements will convey the overall financial reality of the entity (economic substance), rather than simply reporting the legal record of transactions ...
t. e. International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). [ 1] They constitute a standardised way of describing the company's financial performance and position so that company financial statements are understandable ...
Key takeaways. A home's fair market value is, in a nutshell, the price that a buyer would pay a seller in an open market. Many factors go into determining it, including location, size, age ...
Accounting. Generally Accepted Accounting Principles ( GAAP or U.S. GAAP or GAAP (USA), pronounced like "gap") is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) [ 1] and is the default accounting standard used by companies based in the United States . The Financial Accounting Standards Board (FASB ...
Stranded asset. v. t. e. Valuation risk is the risk that an entity suffers a loss when trading an asset or a liability due to a difference between the accounting value and the price effectively obtained in the trade. In other words, valuation risk is the uncertainty about the difference between the value reported in the balance sheet for an ...
The concept of the Fair Value Hierarchy is therefore introduced in paragraphs 22 through 31 in SFAS No. 157. To provide the financial statement user with more insight into the valuation techniques and to create comparability among financial statements, SFAS No. 157 requires the fair value assets and liabilities to be allocated to different levels or hierarchies based on the transparencies of ...