Fair Market Value

Fair Market Value

What is Fair Market Value of a Business?

The is an estimate of what a willing buyer would pay to a willing seller, (both having equal knowledge of the business and transaction variables) in a free market, for an asset or piece of property under conditions where neither party feels pressured or obligated to buy or sell. If a transaction occurs with the aforementioned conditions the transaction price is usually the fair market value. Fair market value is not the same as intrinsic value that an individual may place on an asset, meaning what he or she feels the selling/purchasing price should be based on personal preference.