| Webster's Online Dictionary |
| Expressions | Definition | ||
| Fair value | Fair value, also called fair price, is a concept used in finance and economics. (references) | ||
Source: compiled by the editor from various references; see credits. | Top | ||
| Expressions | Domain | Definition | |
| Fair Value | Administration | A) The definition for Fair Value in Black's Law Dictionary refers to Fair Market Value. Fair Market Value: The price that a seller is willing to accept and buyer is willing to pay on the open market and in an arm's-length transaction; the point where supply and demand intersect; B) Fair Market Value: Refers to "the amount in cash, or terms reasonably equivalent to cash, for which in all probability the property would have sold by a knowledgeable owner willing, but not obligated to sell, to a knowledgeable purchaser, who desired but is not obligated to buy" (UAFFLA, 1992,p. 4). (references) | |
| Fair Value | Economics | (USA) In dumping evaluations, it is the price at which the items being reviewed should have been sold in the home market in order to be considered as goods offered for export in the usual course of trade at fair market value and not guilty of being dumped. (references) | |
| Fair value | Finance | A method of determining what a troubled asset would be worth (its present value) if its present owner sold it in the current market. Fair value assumes a reasonable marketing period, a willing buyer and a willing seller. It assumes that the current selling price (its present value) would rise or fall in relation to the asset's future earnings potential. To calculate that price, fair value converts the asset's future earnings into what they are worth in today's dollars, using a formula that discounts the assets' future net cash flows. The discount is based on the fact that a dollar earned in the future is equal to, say, $.75 invested today plus interest over an equivalent period of time. Thus, a dollar received today and invested is worth more than a dollar received in the future. Fair value, therefore is based on a formula incorporating rates of interest earned. While market value measures the sales price agreed to by the buyer and seller, OTS defines fair value as measuring the value of what the seller would receive less selling costs. Fair value is one accounting method used to calculate the present value of an asset (a loan) at some point after the loan has become past due and book value is no longer valid. See net realizable value. (references) | |
| Gross Positive Fair Value | Finance | The sum total of the fair values of contracts where the bank is owed money by its counterparties, without taking into account netting. This represents the maximum losses a bank could incur if all its counterparties default and there is no netting of contracts, and the bank holds no counterparty collateral. (references) | |
Source: compiled by the editor from various references; see credits. | Top | ||
