{"id":10043,"date":"2023-10-09T20:29:00","date_gmt":"2023-10-09T14:59:00","guid":{"rendered":"https:\/\/www.tickertape.in\/glossary\/?p=10043"},"modified":"2023-10-09T20:29:43","modified_gmt":"2023-10-09T14:59:43","slug":"fair-value","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/glossary\/fair-value\/","title":{"rendered":"Fair Value &#8211; Meaning, Advantages, Formula and Examples"},"content":{"rendered":"\n<p>Various factors and methods can determine the value of an asset. Also, different accounting methods may treat assets differently. And while dealing with assets like equities and <a href=\"https:\/\/www.tickertape.in\/glossary\/mutual-fund-meaning\/\">mutual funds<\/a>, you must have come across the term \u2018fair value.\u2019<\/p>\n\n\n\n<p>But what is fair value? Is it the same as the market value? Can fair value vary from book value? We answer all your questions below!<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_22 counter-hierarchy counter-numeric\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">You will Learn About: <\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" style=\"display: none;\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list ez-toc-list-level-1\"><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#What-is-fair-value\" title=\"What is fair value?\">What is fair value?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Fair-Value-Main-Highlights\" title=\"Fair Value &#8211; Main Highlights\">Fair Value &#8211; Main Highlights<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Fair-value-vs-market-value\" title=\"Fair value vs market value\">Fair value vs market value<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Fair-value-vs-carrying-value\" title=\"Fair value vs carrying value\">Fair value vs carrying value<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Factors-affecting-fair-value\" title=\"Factors affecting fair value\">Factors affecting fair value<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Advantages-of-fair-value-accounting\" title=\"Advantages of fair value accounting\">Advantages of fair value accounting<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Fair-value-formula\" title=\"Fair value formula\">Fair value formula<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Fair-value-calculation-and-example\" title=\"Fair value calculation and example\">Fair value calculation and example<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/glossary\/fair-value\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-fair-value\"><\/span><strong>What is fair value?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"333\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Fair-Value-1024x333.jpeg\" alt=\"\" class=\"wp-image-10623\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Fair-Value-1024x333.jpeg 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Fair-Value-300x98.jpeg 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Fair-Value-1536x499.jpeg 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Fair-Value-1024x333@2x.jpeg 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Fair-Value-300x98@2x.jpeg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>The intrinsic value of any security or asset is defined as its fair value.&nbsp;<\/p>\n\n\n\n<p>It is the price at which both buyers and sellers are willing to exchange the asset freely, without any conditions. The determining factors behind the fair value of the asset or <a href=\"https:\/\/www.tickertape.in\/glossary\/investment-meaning-types-how-to-invest-and-savings-vs-investments\/\">investment<\/a> include the expected earnings from the asset, the cost of asset replacement, and more.&nbsp;<\/p>\n\n\n\n<p>Fair value estimates are generally used to report assets like derivatives, goodwill, non-public entities, securities, etc. The market dynamics determine the fair value of securities\/shares on the <a href=\"https:\/\/www.tickertape.in\/glossary\/stock\/\">stock<\/a> exchange.&nbsp;<\/p>\n\n\n\n<p>Use Tickertape to find the fair value of a company. Go to &#8216;<a href=\"https:\/\/www.tickertape.in\/screener\/equity\" target=\"_blank\" rel=\"noreferrer noopener\">Stock Screener<\/a>&#8216; and select &#8216;Fair Value&#8217; under &#8216;Add Filters&#8217;. You can also use 200+ filters to analyse a company better. <\/p>\n\n\n\n<div class=\"wp-block-uagb-advanced-heading uagb-block-8c971d85\"><h2 class=\"uagb-heading-text\"><span class=\"ez-toc-section\" id=\"Fair-Value-Main-Highlights\"><\/span><strong>Fair Value &#8211; Main Highlights<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2><\/div>\n\n\n\n<ul>\n<li>The fair value of an asset is the estimate of the price at which the buyers and sellers are expected to exchange it.<\/li>\n\n\n\n<li>The fair value varies based on market conditions and determines the worth of the asset.<\/li>\n\n\n\n<li>Fair value is different from market value and carrying value.<\/li>\n\n\n\n<li>Its formula uses the current value of the asset, total dividends that an investor will earn, the rate of interest charged by the broker, and the number of days remaining in the futures contract to calculate fair value.<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Fair-value-vs-market-value\"><\/span><strong>Fair value vs market value<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The fair value measures the intrinsic worth of an asset. Several factors affect its calculation. On the other hand, market value is determined by demand and supply forces. Also, market value changes more often than fair value.<\/p>\n\n\n\n<p>The following table mentions the key differences between fair value and market value:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Fair value<\/strong><\/td><td><strong>Market value<\/strong><\/td><\/tr><tr><td>Fair value is based only on the true value and is not impacted by demand and supply. This is why it is extensively used in accounting.<\/td><td>Market value is decided only after the buyer and seller meet. The price is determined after negotiation and may not always be based on logic.<\/td><\/tr><tr><td>While calculating the fair value of an asset, adjustments are made for impairment. This helps determine the true value of the asset.<\/td><td>Market value is not the right way to determine the true value of an asset. This is because it depends heavily on demand and supply, which constantly change.<\/td><\/tr><tr><td>Fair value is fundamentally derived. Thus, the fair value calculation model is used for the fundamental valuation of an organisation or asset.<\/td><td>Market value is solely based on market conditions and cannot accurately represent the asset\u2019s value.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Fair-value-vs-carrying-value\"><\/span><strong>Fair value<\/strong><strong> vs carrying value<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The value of a company\u2019s assets can be calculated using two different accounting methods \u2013 the fair value and carrying value&nbsp;<\/p>\n\n\n\n<p>The table below illustrates the differences between fair value and carrying value:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Fair value<\/strong><\/td><td><strong>Carrying value<\/strong><\/td><\/tr><tr><td>The intrinsic value of an asset is its fair value. Risk factors, profit margins, and expected growth rates are analysed to calculate fair value.<\/td><td>The carrying value is also referred to as the book value. It is the value of an asset according to the balance sheet of the company. It is calculated by subtracting <a href=\"https:\/\/www.tickertape.in\/glossary\/depreciation-meaning\/\">depreciation<\/a> from the cost of the asset.&nbsp;&nbsp;<\/td><\/tr><tr><td>Fair value represents the current market price that both buyer and seller agree upon.<\/td><td>Carrying value reflects the firm\u2019s equity.&nbsp;<\/td><\/tr><tr><td>This transaction benefits both parties.&nbsp;<\/td><td>There is no subjectivity involved when calculating the carrying or book value. This helps investors truly understand the asset\u2019s value and formulate strategies.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Note that the fair value of an asset fluctuates more frequently than the carrying value or book value and can be lower than the market value at any time. The differences are normally looked at when the assets are sold and appraised. This helps to ascertain whether an asset is undervalued or overvalued.<\/p>\n\n\n\n<p>Use Tickertape to find the book value of the company. Visit the &#8216;<a href=\"https:\/\/www.tickertape.in\/screener\/equity\" target=\"_blank\" rel=\"noreferrer noopener\">Stock Screener<\/a>&#8216; and under &#8216;Add Filters&#8217;, search and select &#8216;Book Value&#8217;. <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"501\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-21-at-4.10.13-PM-1024x501.png\" alt=\"\" class=\"wp-image-10049\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-21-at-4.10.13-PM-1024x501.png 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-21-at-4.10.13-PM-300x147.png 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-21-at-4.10.13-PM-1536x751.png 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-21-at-4.10.13-PM-1024x501@2x.png 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-21-at-4.10.13-PM-300x147@2x.png 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<h2><span class=\"ez-toc-section\" id=\"Factors-affecting-fair-value\"><\/span>Factors affecting fair value<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Earnings and revenue growth: <\/strong>The growth rate of a company&#8217;s earnings and revenue is a significant factor in determining its fair value. Companies with strong and consistent growth tend to have higher fair values.<\/p>\n\n\n\n<p><strong>Competitive advantage:<\/strong> Companies with a sustainable competitive advantage, such as a strong brand, unique technology, or a dominant market position, tend to have higher fair values.<\/p>\n\n\n\n<p><strong>Economic conditions: <\/strong>The overall economic conditions, such as interest rates, inflation, and unemployment rates, can have a significant impact on the fair value of stocks.<\/p>\n\n\n\n<p><strong>Risk and volatility: <\/strong>A higher risk and volatility in a stock may lead to a lower fair value, as investors may demand a higher return to compensate for the added risk.<\/p>\n\n\n\n<p><strong>Debt levels and financial health: <\/strong>A company&#8217;s debt levels and financial health can influence its fair value. The high levels of debt may increase risk and reduce fair value.<\/p>\n\n\n\n<p><strong>Quality of management: <\/strong>Competent and experienced management teams can positively influence a company&#8217;s fair value.<\/p>\n\n\n\n<p><strong>Industry and market conditions: <\/strong>The overall conditions of the industry and broader market can impact a stock&#8217;s fair value. For example, a booming industry may lead to higher valuations.<\/p>\n\n\n\n<p><strong>Regulatory environment: <\/strong>Changes in regulations or government policies can have a significant impact on certain industries and companies, affecting their fair values.<\/p>\n\n\n\n<p><strong>Technological advances:<\/strong> In industries driven by technology, innovation and technological advances can significantly impact a company&#8217;s fair value. For instance, recently, Dabur became the 1st FMCG company to complete its cloud migration. This news may add to its stock value.&nbsp;<\/p>\n\n\n\n<p><strong>Global events and macroeconomic events: <\/strong>Events with global implications, such as pandemics, trade disputes, geopolitical conflicts, or natural disasters, can have far-reaching effects on stock valuations.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Advantages-of-fair-value-accounting\"><\/span><strong>Advantages of fair value accounting<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"364\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Advantages-of-fair-value-accounting-1024x364.jpeg\" alt=\"\" class=\"wp-image-10625\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Advantages-of-fair-value-accounting-1024x364.jpeg 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Advantages-of-fair-value-accounting-300x107.jpeg 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Advantages-of-fair-value-accounting-1536x546.jpeg 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Advantages-of-fair-value-accounting-1024x364@2x.jpeg 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/10\/Advantages-of-fair-value-accounting-300x107@2x.jpeg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>Below are the advantages of the fair value accounting method:<\/p>\n\n\n\n<ul>\n<li><strong>Increased valuation accuracy<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Fair value accounting leads to more accurate valuations (The valuation will be higher when the prices increase and lower when the prices decrease).<\/p>\n\n\n\n<ul>\n<li><strong>A true indicator of income<\/strong><\/li>\n<\/ul>\n\n\n\n<p>In fair value accounting, the company\u2019s actual income is the total value of assets, i.e., it doesn\u2019t depend on profit and loss reports, just the actual value.<\/p>\n\n\n\n<ul>\n<li><strong>Can be adapted to various asset types<\/strong><\/li>\n<\/ul>\n\n\n\n<p>The method that uses historical cost value isn\u2019t as accurate as the fair value method because it changes over time. On the other hand, the fair value method can be used to make valuations of different asset types.<\/p>\n\n\n\n<ul>\n<li><strong>Helps to sustain businesses in difficult times<\/strong><\/li>\n<\/ul>\n\n\n\n<p>During financially difficult times, fair value accounting can help businesses survive. This is because it helps adjust assets and their value (in accounting terms, this is also known as asset reduction).&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Fair-value-formula\"><\/span><strong>Fair value formula<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The fair value of an asset is computed from the futures market, i.e. future cash flows determine the current price. Below is the fair value shares formula.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>Fair value formula<\/strong><strong> = Cash [1 + r (x\/360)] \u2013 Dividends<\/strong><\/p>\n\n\n\n<p>Here,<\/p>\n\n\n\n<ul>\n<li>Cash&nbsp;is the security&#8217;s current value.<\/li>\n\n\n\n<li>r&nbsp;is the current interest rate that the broker charges.<\/li>\n\n\n\n<li>x&nbsp;is the remaining days in the futures contract&nbsp;<\/li>\n\n\n\n<li>Dividends&nbsp;refer to the total dividends that the investor will earn before the expiration date<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Fair-value-calculation-and-example\"><\/span><strong>Fair value calculation and example<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let us assume that a particular stock is currently trading at Rs. 1,500, and 2% interest on sale is payable to the broker. There are 30 days to the contract expiration, and the investor earns 4 dividend points.<\/p>\n\n\n\n<p>The fair value of a share is equal to 1500 [ 1+ 0.02 (30\/360)] \u2013 4 = Rs. 1,497<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Fair value of an asset is its intrinsic value, determined by fundamental forces. It is important to truly differentiate fair value from market and carrying value to understand the value of an asset. Understand the fair value and its nuances to decipher how it is accounted for and how to read it.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-7584b701 uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-true uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height\" data-faqtoggle=\"true\" role=\"tablist\">\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-ebe97c79\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What are the disadvantages of fair value accounting?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Businesses with volatile assets do not benefit from fair value accounting because the values may fluctuate several times. Fair value accounting does not depict an accurate picture of the asset value.<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-40dbaf82\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>Which methods are used to determine fair value?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">A common way to determine fair value is to compare it with actual market transactions and prices associated with similar assets. This is called the market approach. There is also an income approach that considers the expected cash flows and earnings to derive the present fair value. It can also be derived using the cost approach that uses the approximate cost of asset replacement.<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-f437b4a7\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>Should you consider fair value or market value?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Fundamentally, you should consider the intrinsic or the fair value. However, market value, determined by demand and supply, is also important as it determines the worth of an asset in the market.\u00a0<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-daf89f40\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is fair value accounting?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Fair value accounting is a way to measure any business\u2019 assets and liabilities based on their current market value. It is the price\/value of an asset agreed upon by both the seller and the buyer.<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Fair value is the intrinsic value of any asset. Learn more about it, its formula, factors that affect fair value, and more here.<\/p>\n","protected":false},"author":96,"featured_media":9962,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[1],"tags":[],"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05.png","uagb_featured_image_src":{"full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05.png",2086,1086,false],"thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-150x150.png",150,150,true],"medium":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-300x156.png",300,156,true],"medium_large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05.png",768,400,false],"large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-1024x533.png",770,401,true],"1536x1536":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-1536x800.png",1536,800,true],"2048x2048":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-2048x1066.png",2048,1066,true],"authorship-box-avatar":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-150x150.png",150,150,true],"authorship-box-related":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-70x70.png",70,70,true],"post-thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-270x180.png",270,180,true],"contentberg-main":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-770x515.png",770,515,true],"contentberg-main-full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-1170x508.png",1170,508,true],"contentberg-slider-stylish":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-900x515.png",900,515,true],"contentberg-slider-carousel":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-370x370.png",370,370,true],"contentberg-slider-grid-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-554x466.png",554,466,true],"contentberg-slider-grid-b-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-306x466.png",306,466,true],"contentberg-slider-bold-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-150x150.png",150,150,true],"contentberg-grid":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-370x245.png",370,245,true],"contentberg-list":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-260x200.png",260,200,true],"contentberg-list-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-370x305.png",370,305,true],"contentberg-thumb":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-87x67.png",87,67,true],"contentberg-thumb-alt":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/05-150x150.png",150,150,true]},"uagb_author_info":{"display_name":"Nikitha","author_link":""},"uagb_comment_info":219,"uagb_excerpt":"Fair value is the intrinsic value of any asset. Learn more about it, its formula, factors that affect fair value, and more here.","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10043"}],"collection":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/users\/96"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/comments?post=10043"}],"version-history":[{"count":6,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10043\/revisions"}],"predecessor-version":[{"id":10626,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10043\/revisions\/10626"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media\/9962"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media?parent=10043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/categories?post=10043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/tags?post=10043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}