6.3 Most Advantageous Market
ASC 820-10 — Glossary
Most Advantageous Market
The market that maximizes the amount that would be received
to sell the asset or minimizes the amount that would be paid
to transfer the liability, after taking into account
transaction costs and transportation costs.
The concept of a most advantageous market is relevant only when there is no principal
market for an asset, liability, or equity instrument. In identifying the most
advantageous market, an entity must consider both its own and market participants’
perspectives. An entity considers its own perspective in identifying markets that it
can access. An entity then considers market-participant perspectives in assessing
which of two or more accessible markets is the most advantageous market. Thus, the
assessment and considerations in Section 6.2
that pertain to determining the principal market are also relevant in an entity’s
determination of the most advantageous market. Note that while an entity considers
both transaction and transportation costs in determining the most advantageous
market, transaction costs are not included in a fair value measurement under ASC 820
(as discussed in Section 10.2.5.3).