Business Valuation Glossary
Fair Market Value Definition
Definition
When referring to the transfer of a business asset, the fair market value is defined as a monetary amount that a buyer may reasonably offer, and a seller accept, in exchange for the asset.
What It Means
The fair market value of an asset is established when a willing business buyer and a willing seller reach an agreement, with both parties acting in full knowledge of all facts and not being forced to conclude the transaction by circumstances.