# Fair Value

*Accounting & Reporting — Finicade finance glossary*

Fair value is the price an asset would fetch in an orderly transaction between willing parties today. Reporting standards rank the evidence: Level 1 is a quoted market price, Level 2 uses observable inputs, Level 3 is a model with unobservable ones. The proportion of Level 3 assets on a balance sheet is a direct measure of how much of the reported value is management opinion.

**Also known as:** fair value accounting, level 1 2 3 inputs

**Related terms:** [Mark to Market](https://finicade.com/glossary/mark-to-market), [Impairment](https://finicade.com/glossary/impairment), [Model Risk](https://finicade.com/glossary/model-risk), [Financial Statements](https://finicade.com/glossary/financial-statements), [Liquidity](https://finicade.com/glossary/liquidity)

Source: https://finicade.com/glossary/fair-value