Write in depth on “Standards of Value,” as in Trugman Chapter 4

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The second standard of value is fair value, which presents different meanings in the business valuation field. In financial reporting, fair value refers to the price paid to transfer a liability or received to sell assets in a transaction between market participants at a stated date. This standard of value requires the entry price in the initial transaction to equal the exit price. Based on corporate governance principles, fair value should be determined based on the standard valuation techniques used in financial markets (Trugman, 2017). This definition suggests the eligibility of the interest in the property, and no discounts should be offered based on unique circumstances such as minority status. The difference between fair market value and fair value is that the former requires a willing buyer and seller who should not be compelled to act.

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Standards of Value