Fair Value Measurement

Fair value measurement is the process of estimating the price an asset or liability would fetch in an orderly transaction between knowledgeable, willing parties at the measurement date. It reflects current market conditions and considers relevant factors like market prices, valuation techniques, and assumptions. This helps investors and companies make consistent, transparent assessments of an asset’s worth, ensuring financial statements accurately represent the company's financial position. Essentially, fair value provides a standardized way to gauge the true market value of assets and liabilities at a specific point in time.