Fair value measures
Definition: amount at which an asset could be exchanged or a liability settled in a current hypothetical transaction between knowledgeable unrelated willing parties
transaction => no requirement that a market exist
transaction => measure is not intended to capture the most likely settlement amount
Example: An arrangement will settle for 100 with probability .30 and for 0 with probability .70. The most likely settlement amount is 0. A current transaction would reflect the dispersion of outcomes: .30 x 100 + .70 x 0 => 30.