GIPS-Portfolio Valuation

Based on CAFI item sets, there was a statement that is supposed to be correct but I’m a bit confused.

“Portfolios must be valued in accordance with the definition of fair value, not cost or book values. In fact, fair value supersedes market value”

If the above is correct why is portfolio valuation must be based on market value?

Fair value represents the price at which two independent reasonable people would exchange something for. It properly reflects the current environment.

Market value is the price somebody is asking for. It may unreasonable high, especially for thinly traded securities that cannot be readily valued.

Most of the time for liquid securities FV = MV.

For all intents and purposes all you need to know is GIPS requires fair value.