Fair Value Accounting

Fair Value Accounting is a method used to measure and report the value of an asset or liability based on its current market price, rather than its historical cost. This approach reflects how much an asset could be sold for or how much a liability would cost to settle in an open market. It aims to provide a more accurate and timely picture of a company's financial health, making it easier for investors and stakeholders to assess the true worth of a company’s resources and obligations, especially in volatile markets.