Answer
A fair value in financial accounting can be viewed to as the price to be received on the sale of an asset or paid to transfer a liability in an orderly transaction that is between market participants at the measurement date. In the same manner, we can state that a fair value is therefore a market-based measure.
Work Step by Step
A fair value can also be viewed as the sale price agreed upon by two parties upon a willing buyer and seller, that is while assuming both parties enter the transaction freely and knowledgeably.
