Fair Market Value (FMV)

Fair Market Value (FMV) is the price at which a property, asset, or security would change hands between a knowledgeable, willing buyer and a knowledgeable, willing seller in an open, competitive market. It represents the value of an asset under normal conditions, without undue pressure on either party.

FMV is an essential valuation concept widely used in accounting, taxation, mergers and acquisitions, financial reporting, and legal proceedings. Determining FMV involves assessing comparable market data, asset condition, economic trends, and sometimes professional appraisals.

It differs from other valuation benchmarks like book value (historical cost) or liquidation value (forced sale price). In jurisdictions using AED, FMV often influences asset valuations for corporate disclosures, estate settlements, divorce proceedings, and shareholder buyouts.