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 the Difference between Fair Market Value and Fair Value Business 2020

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Welcome to the Investors Trading Academy talking glossary of financial terms and events. Our word of the day is “Fair Value” Fair value is the practice of measuring assets and liabilities at estimates of their current value. This marks a major departure from the centuries-old tradition of keeping books at historical cost. It also has implications across the world of business, because the accounting basis—whether fair value or historical cost—affects investment choices and management decisions, with consequences for aggregate economic activity. Fair value accounting was blamed for some dubious practices in the period leading up to the Wall Street crash of 1929, and was virtually banned by the U.S. Securities and Exchange Commission from the 1930s through the 1970s. The 2008 financial crisis brought it under fire again. Some scholars and practitioners have connected its proliferation in accounting-based performance metrics to the actions of bankers and other managers during the r

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