Fair Value is an accounting term that refers to the estimated worth of an asset or liability based on current market conditions. It represents the price that two willing parties would agree upon in an open market transaction. Fair value is often used in financial reporting to provide a more accurate picture of a company's financial health. To determine Fair Value, various methods can be employed, including market comparisons, income approaches, and cost approaches. These methods take into account factors such as market trends, the asset's condition, and potential future earnings, ensuring that the valuation reflects its true economic value.