Fair market value

Fair market value is supposed to represent the most accurate assessment of the value of an asset. Fair market value is worked out using the following assumptions: potential buyers and sellers are reasonably knowledgeable about the asset and will act in their own best interest and are not under pressure to conclude a deal. A second condition that must be applied to work out the fair market value is that the buyer and seller must be given a reasonable time period in which to complete the transaction.