What is the definition of fair value under FAS 157?
For financial reporting purposes, the definition of fair value as stated in SFAS No. 157 is: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement is for a particular asset or liability. Therefore, the measurement should consider attributes specific to the asset or liability, for example, the condition and/or location of the asset or liability might be a standalone asset or liability (for example, a financial instrument or an operating asset) or a group of assets and/or liabilities (for example, an asset group, a reporting unit, or a business). The fair value premise can be applied to valuations of real estate, machinery & equipment, intangible assets and business interests. In performing our appraisals, Cambridge Partners follows generally accepted appraisal standards, as promulgated by the American Society of Appraisers (ASA).
