What is the US GAAP codification topic for fair value measurement? The answer is ASC 820.
ASC 820 is the FASB Accounting Standards Codification topic titled “Fair Value Measurement.” It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The topic provides a common framework for measuring fair value and requires disclosures about those measurements. It emphasizes using observable market inputs when available, while still providing a hierarchy for valuations based on less-direct evidence when active-market prices do not exist.
ASC 820 grew out of FASB Statement No. 157, issued in 2006, which established a more consistent fair-value framework. The topic is often confused with ASC 718, which addresses stock compensation, ASC 350, which covers goodwill and intangible assets, and ASC 505, which concerns equity. Those topics may require fair-value measurements in particular situations, but ASC 820 supplies the general measurement and disclosure guidance.