Where an asset is exchanged between a willing seller and a willing buyer and the exchange price is below the market price due to fact that the parties involved are related, the resulting exchange price is referred to as fair value.

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The described scenario would result in a transaction at a "related party price" or "arms-length price," but not necessarily fair value. Fair value is a valuation concept that seeks to determine the price at which an asset would change hands in an orderly transaction between market participants, not necessarily between related parties.

Where an Asset Is Exchanged Between a Willing Seller and a Willing