Fair value is based on assumptions that market participants would use in pricing the asset or liability. ‘Market participants’ are buyers and sellers in the principal (or most advantageous) market who have all of the following characteristics:
- they are independent of each other;
- they are knowledgeable;
- they are able to enter into a transaction for the asset or liability; and
- they are willing to enter into a transaction – i.e. motivated but not forced. [IFRS 13.22, A]
IFRS Synonyms:
buyer, buyers, seller, sellers
