Fair Value Vs Market Value
The latest edition of International Valuation Standards (IVS 2007), clearly distinguishes between fair value, as defined in the IFRS, and market value, as defined in the IVS:
- So As the term is generally used, Fair Value can be clearly distinguished from Market Value. It requires the assessment of the price that is fair between two specific parties taking into account the respective advantages or disadvantages that each will gain from the transaction. Although Market Value may meet these criteria, this is not necessarily always the case. Fair Value is frequently used when undertaking due diligence in corporate transactions, where particular synergies between the two parties may mean that the price that is fair between them is higher than the price that might be obtainable on the wider market. On other words Special Value may be generated. Market Value requires this element of Special Value to be disregarded, but it forms part of the assessment of Fair Value.
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Famous quotes containing the words fair and/or market:
“Personal size and mental sorrow have certainly no necessary proportions. A large bulky figure has a good a right to be in deep affliction, as the most graceful set of limbs in the world. But, fair or not fair, there are unbecoming conjunctions, which reason will pa tronize in vain,—which taste cannot tolerate,—which ridicule will seize.”
—Jane Austen (1775–1817)
“the old palaces, the wallets of the tourists,
the Common Market or the smart cafés,
the boulevards in the graceful evening,
the cliff-hangers, the scientists,
and the little shops raising their prices
mean nothing to me.”
—Anne Sexton (1928–1974)