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Fair Market Value

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Fair Market Value (FMV) is a valuation using assumptions that include:

  • A willing buyer and a willing seller, with both parties having the facts about the asset. Fair market value is also regarded as the price an "interested but not desperate" buyer and an "interested but not desperate" seller agree upon.
  • An open market; that is, one which is accessible by many buyers and sellers, and which is not closed or private.

Fair Market Value can be used to value the assets of a business, including equipment, machinery, furniture and fixtures, and real property. FMV can also be used to value the business as a whole. A business appraiser will certainly include FMV in his or her valuation report.

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