Hello,
I’m reading the different recording alternatives for assets and liabilities and lots of the alternatives is either something (example: amortized cost) or FAIR VALUE.
WHAT IS EXACTLY FAIR VALUE???
IFRS: the amount at which an asset could be exchanged or a liability settled in an arm’s length transaction between knowledgeable and willing parties.
US GAAP: essentially the same, but uses exit price (price to sell an asset or transfer a liability) instead of entry price (price to buy an asset, or incur a liability).
Practical definition: price to buy or sell an asset, price to incur or settle a liability.
You’re welcome.