Fair value is always market price

Definition: Fair value is the price that would be received to sell an asset in an orderly transaction (ASC 820). When no active market exists, fair value is es…

Reality

Fair value is the price that would be received to sell an asset in an orderly transaction (ASC 820). When no active market exists, fair value is estimated using Level 2 (comparable) or Level 3 (model-based) inputs, not a quoted market price.

Why It MattersUnderstanding why "fair value is always market price" is a misconception helps avoid analytical errors and improper financial decision-making.
CategoryMeasurement

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