# ASC 820-10-05: Fair Value Measurement — Overall — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/820/10/#05-overview-and-background) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:41723f59db0da9bc67592b59f027c72d52a8672f66d6f69e158912ff102ec88a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/820/10/#05-overview-and-background) SEC content: no ##### [820-10-05-1](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:1a9a7abbb4baab17b796d516ed4b3c75ad18191ab6a72986637d8f2c62033979 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic contains only the Overall Subtopic. This Topic does all of the following: 1. a Defines [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") 2. b Sets out in a single Topic a framework for measuring fair value 3. c Requires disclosures about fair value measurements. ##### [820-10-05-1A](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:fb178d8a3ece121d6ff7f399109435237d9ec9c73ca7783ab9c97f04769148cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic explains how to measure fair value for financial reporting. It does not require fair value measurements in addition to those already required or permitted by other Topics and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. ##### [820-10-05-1B](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-1B) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:96527422393b62fe7e033fb62b6007d7983fdc7b1247f7c3dffab5d6ba667229 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same—to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an [exit price](https://asc.understandingaccounting.org/glossary/e/#exit-price "The price that would be received to sell an asset or paid to transfer a liability.") at the measurement date from the perspective of a market participant that holds the asset or owes the liability). ##### [820-10-05-1C](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-1C) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:4126b8b61e1c21767aa62b5561e856ff68eac81971abd02e387ed28583676214 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a price for an identical asset or liability is not observable, a reporting entity measures fair value using another valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. Because fair value is a market-based measurement, it is measured using the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. As a result, a reporting entity's intention to hold an asset or to settle or otherwise fulfill a liability is not relevant when measuring fair value. ##### [820-10-05-1D](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-1D) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:7fc362683dae9cabd48b918df20ae71985c06af407df81a86409a2b07337e84b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The definition of fair value focuses on assets and liabilities because they are a primary subject of accounting measurement. In addition, this Topic shall be applied to instruments measured at fair value that are classified in shareholders' equity. ##### [820-10-05-2](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:2b0a259008a3c7adfce78a9b2682d0566c2f99bd2f71cb2941ad545485fbbfb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2011-04](https://asc.understandingaccounting.org/updates/asu-2011-04/). ##### [820-10-05-3](https://asc.understandingaccounting.org/asc/820/10/#820-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:15.443Z to 2026-09-10T01:43:15.443Z Record version: sha256:ede4617d4b97289e6e7965a145f8d0b0cd32abbd8f393809c398b4d03dab29d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2011-04](https://asc.understandingaccounting.org/updates/asu-2011-04/).