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Most Advantageous Market


The market that maximizes the amount that would be received from sale of an asset or minimizes the amount that would be paid for transfer of a liability, after taking into consideration transaction costs and other relevant costs. For instance, in a most advantageous market, agent’s commission and legal fees are considered in the price used to fair value a property.

In practice, the absence of a principal market means that the entity’s management has to identify the most advantageous market. A principal market may sometimes not exist when the volume or level of activity for the asset or liability is equal in two different markets in which the entity usually transacts, or when it has no observable market for its transactions (on asset or liability side). In this situation, the entity has to identify the most advantageous market. If it is still not identifiable, the entity would need to develop assumptions from the perspective of a market participant in an imaginary most advantageous market setting: using coy hypotheticals or “what if” scenarios.



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Accounting is the language of business, everywhere, worldwide. It is the means by which virtually every business communicates information about its operations, irrespective of size, scale, objectives, ...
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