Fair Value Measurements

Free CPA FAR (Financial Accounting & Reporting) lesson in Select Transactions. 17 min read, ~2,549 words.

Fair value = exit price (what you would receive to sell), not entry price (what you paid), measured at the measurement date. Hierarchy level is set by the lowest-level significant input, not the valuation technique. Three approaches: market (comparables), income (DCF), cost (replacement); the chosen approach does not control the...