# ASC 820-10-30: Fair Value Measurement — Overall — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/820/10/#30-initial-measurement) 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): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:2cad364194f5be300d9c52fc3b9bbc6331a640dd916f98aa70cc89a94ca05f25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 820-10-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/820/10/#30-initial-measurement) SEC content: no ##### [820-10-30-1](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:bb52f7d52eaef8ab26d189b2e7b23bf025bb6534770f59838894c8ad39c6d62b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fair value measurement framework, which applies at both initial and subsequent measurement if [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.") is required or permitted by other Topics, is discussed primarily in Section 820-10-35. This Section sets out additional guidance specific to applying the framework at initial measurement. ##### [820-10-30-2](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:ce576ddd19073920d92ade2dee09141f37a0e003dc4c31039d8388c49c534e37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an asset is acquired or a liability is assumed in an exchange transaction for that asset or liability, the transaction price is the price paid to acquire the asset or received to assume the liability (an [entry price](https://asc.understandingaccounting.org/glossary/e/#entry-price "The price paid to acquire an asset or received to assume a liability in an exchange transaction.")). In contrast, the fair value of the asset or liability is the price that would be received to sell the asset or paid to transfer the liability (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.")). Entities do not necessarily sell assets at the prices paid to acquire them. Similarly, entities do not necessarily transfer liabilities at the prices received to assume them. ##### [820-10-30-3](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:7af5e517f6f4d8800bb2982d5d8f7c2392f5dec40d838e84faf9c9cb93669f75 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In many cases, the transaction price will equal the fair value (for example, that might be the case when on the transaction date the transaction to buy an asset takes place in the market in which the asset would be sold). 1. a [Subparagraph superseded by Accounting Standards Update No. 2011-04](https://asc.understandingaccounting.org/updates/asu-2011-04/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2011-04](https://asc.understandingaccounting.org/updates/asu-2011-04/). 3. c [Subparagraph superseded by Accounting Standards Update No. 2011-04](https://asc.understandingaccounting.org/updates/asu-2011-04/). 4. d [Subparagraph superseded by Accounting Standards Update No. 2011-04](https://asc.understandingaccounting.org/updates/asu-2011-04/). ##### [820-10-30-3A](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-3A) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:092cac568674fec35fefdaad97098ed1c16545c48c5a51c0eccddb8cc2f2a24c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When determining whether fair value at initial recognition equals the transaction price, a reporting entity shall take into account factors specific to the transaction and to the asset or liability. For example, the transaction price might not represent the fair value of an asset or a liability at initial recognition if any of the following conditions exist: 1. a The transaction is between [related parties](https://asc.understandingaccounting.org/glossary/r/#related-parties "Related parties include: Affiliates of the entity Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity Trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management Principal owners of the entity and members of their immediate families Management of the entity and members of their immediate families Other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests."), although the price in a related party transaction may be used as an input into a fair value measurement if the reporting entity has evidence that the transaction was entered into at market terms. 2. b The transaction takes place under duress or the seller is forced to accept the price in the transaction. For example, that might be the case if the seller is experiencing financial difficulty. 3. c The [unit of account](https://asc.understandingaccounting.org/glossary/u/#unit-of-account "The level at which an asset or a liability is aggregated or disaggregated in a Topic for recognition purposes.") represented by the transaction price is different from the unit of account for the asset or liability measured at fair value. For example, that might be the case if the asset or liability measured at fair value is only one of the elements in the transaction (for example, in a [business combination](https://asc.understandingaccounting.org/glossary/b/#business-combination "A transaction or other event in which an acquirer obtains control of one or more businesses. Transactions sometimes referred to as true mergers or mergers of equals also are business combinations. See also Acquisition by a Not-for-Profit Entity.")), the transaction includes unstated rights and privileges that are measured separately, in accordance with another Topic, or the transaction price includes [transaction costs](https://asc.understandingaccounting.org/glossary/t/#transaction-costs "The costs to sell an asset or transfer a liability in the principal (or most advantageous) market for the asset or liability that are directly attributable to the disposal of the asset or the transfer of the liability and meet both of the following criteria: They result directly from and are essential to that transaction. They would not have been incurred by the entity had the decision to sell the asset or transfer the liability not been made (similar to costs to sell, as defined in paragraph 360-10-35-38)."). 4. d The market in which the transaction takes place is different from the [principal market](https://asc.understandingaccounting.org/glossary/p/#principal-market "The market with the greatest volume and level of activity for the asset or liability.") (or [most advantageous market](https://asc.understandingaccounting.org/glossary/m/#most-advantageous-market "The market that maximizes the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs and transportation costs.")). For example, those markets might be different if the reporting entity is a dealer that enters into transactions with customers in the retail market, but the principal (or most advantageous) market for the exit transaction is with other dealers in the [dealer market](https://asc.understandingaccounting.org/glossary/d/#dealer-market "A market in which dealers stand ready to trade (either buy or sell for their own account), thereby providing liquidity by using their capital to hold an inventory of the items for which they make a market. Typically, bid and ask prices (representing the price at which the dealer is willing to buy and the price at which the dealer is willing to sell, respectively) are more readily available than closing prices. Over-the-counter markets (for which prices are publicly reported by the National Association of Securities Dealers Automated Quotations systems or by OTC Markets Group Inc.) are dealer markets. For example, the market for U.S. Treasury securities is a dealer market. Dealer markets also exist for some other assets and liabilities, including other financial instruments, commodities, and physical assets (for example, used equipment)."). ##### [820-10-30-4](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:286386293f360dc3883541cf6e55af60aa01b391fa3e6daa2e5f763c7570dd94 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/). ##### [820-10-30-5](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:96929d8c6fae4056f7ed9f9e64ca51090c1d79baad928fc4615e1b40e6c23243 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [820-10-55-46](https://asc.understandingaccounting.org/asc/820/10/#820-10-55-46) illustrates situations in which the price in a transaction involving a derivative instrument might (and might not) equal the fair value of the instrument. ##### [820-10-30-6](https://asc.understandingaccounting.org/asc/820/10/#820-10-30-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:43:25.090Z to 2026-09-10T01:43:25.090Z Record version: sha256:3323a5be0a777fd9b7ffb061d9567f9bf6109f3fe7c4a51bd4f6ecba0e05ffb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If another Topic requires or permits a reporting entity to measure an asset or a liability initially at fair value and the transaction price differs from fair value, the reporting entity shall recognize the resulting gain or loss in earnings unless that Topic specifies otherwise.