Definition
IFRS 13 and ASC 820 define fair value as an exit price under current market conditions, measured using the assumptions market participants would use. It is a market-based measurement rather than an entity-specific one: the holder’s intentions do not change it. Where no observable price exists, fair value is estimated with a valuation technique that maximises observable inputs and minimises unobservable ones.
Why it matters in private credit valuation
- Fair value is the standard a private credit mark is held to in audited accounts and LP reporting — so the question is always “what would a market participant pay?”, not “what is it worth to us?”.
- Because private debt rarely trades, the exit-price standard is met through a model, which is exactly why calibration and documentation carry the weight.
Related
Glossary terms
On markst
Independent valuation, on your own positions
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.