Definition
IFRS 13 and ASC 820 anchor fair value to an exit price: the price to sell an asset, or transfer a liability, from the perspective of a market participant who holds it. This is deliberately the disposal side, not the entry side. The price paid to originate or acquire an instrument is an entry price, and the two can differ at the moment of the trade — for example where fees, structuring or negotiating position sit on one side of the transaction. Carrying value is an accounting balance that may lag the market; the exit price asks what could be realised now, in an orderly sale rather than a forced one. For private credit, no quoted exit price exists, so it is estimated with a model that prices the instrument as a market participant buyer would.
Why it matters in private credit valuation
- A private credit mark is an estimate of an exit price, so the test is always what a buyer would pay to take the position on — not what the holder paid, and not the amortised balance.
- Entry price and exit price can diverge at origination; recognising that gap is part of why a Day-1 mark is a calibration exercise, not a restatement of cost.
Related
Glossary terms
On markst
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markst values private credit independently on a published, reproducible methodology — marks an auditor and an LP can read straight through. Request access or book a demo. You can also read the valuation methodology or see Verus, the valuation engine.