One of these is a stable regulatory definition that has not moved in decades. The other is a term of art whose entire content is supplied by the statute and the proceeding you happen to be in.
Start a conversation with the Valuation Concierge, already scoped to fair value and fair market value. Pick a starting point, or describe the matter directly.
Fair market value is a regulatory construct with fixed wording: the price at which property would change hands between a willing buyer and a willing seller, neither under compulsion, both with reasonable knowledge. It is the same sentence in the estate regulation and the gift regulation, and Rev. Rul. 59-60 adopts it while conceding that value is a question of fact and that no generally applicable formula exists. Fair value is the opposite kind of term. The 2022 International Valuation Glossary describes it as ‘a Standard of Value for which there are different definitions, depending on the context and purpose,’ typically ‘defined or imposed by a third party (e.g., by law, regulation, contract, or financial reporting standard-setting bodies).’ Its content is whatever the governing statute, and the courts reading it, supply.
Six features of these two terms that change the answer rather than the vocabulary.
Treas. Reg. §20.2031-1(b): ‘The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.’ Section 25.2512-1 is materially identical for gifts. Because both parties are hypothetical, a hypothetical buyer of a minority block really would pay less for it — which is why level-of-value adjustments sit naturally inside this definition and are barred on the face of some others.
The 2022 International Valuation Glossary — published jointly by ASA, CBV Institute, RICS and TAQEEM — concedes its own authority on this term: ‘If any term in this glossary conflicts with a published governmental, judicial, or accounting authority, precedence should be given to the use and interpretation of terms as they appear in applicable published authoritative guidance, given the purpose of the valuation.’ Where the law speaks, the profession’s definition yields.
Va. Code §13.1-729 defines fair value as the value of the corporation’s shares determined (i) ‘Immediately before the effectiveness of the corporate action to which the shareholder objects’; (ii) ‘Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal’; and (iii) ‘Without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles of incorporation pursuant to subdivision A 5 of § 13.1-730.’ Date, method and discounts, decided in one breath — and note the exception most secondary writing omits. Read against the official code text in September 2026.
8 Del. C. §262(h) directs the Court of Chancery to ‘determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, consolidation, conversion, transfer, domestication or continuance,’ and to ‘take into account all relevant factors.’ The content is entirely judge-made. Tri-Continental Corp. v. Battye, 74 A.2d 71 (Del. 1950), supplied the foundation: the stockholder is entitled to ‘his proportionate interest in a going concern.’
Ohio’s dissenters’ statute has never used ‘fair value’; it entitles the dissenter to ‘fair cash value’ (Ohio Rev. Code §1701.85(C)(1)). Under the pre-2012 version, courts read the willing-buyer language as leaving room for shareholder-level discounts. Effective 4 May 2012, H.B. 48 (129th Gen. Assemb.) added §1701.85(C)(1)(b), which now excludes ‘any premium associated with control of the corporation, or any discount for lack of marketability or minority status.’ Ohio kept its vocabulary and abandoned the result that vocabulary had been thought to compel.
Investment value is value to a particular owner, which is why it belongs to negotiated transactions rather than to adjudicated ones. Intrinsic value is defined in the 2022 glossary without the Standard of Value label carried by Fair Market Value, Market Value, Fair Value and Investment Value, and BVS-VIII IV.C omits it too. It is an analyst’s view of true worth, not a definition a tribunal imposes.
How the governing definition is identified, read and then held to.
The definition sets the ceiling and the floor before any modeling is done.
In Bohac v. Benes Service Co., 310 Neb. 722 (2022), a buyout under Nebraska’s analogue to MBCA §14.34, the Supreme Court held that use of ‘fair value’ rather than ‘fair market value’ suggested ‘disapproval of a fair market value approach and the discounting that would accompany it.’ It vacated the award because the district court had both used the wrong definition and subjected the shares to discounts under it.
No. That formulation collapses two different axes and it fails on its own terms. Fair market value is a definition of the transaction being imagined — a hypothetical willing buyer and willing seller, neither compelled, both informed. Fair value is a definition supplied by a statute, a court or a contract, and what it excludes varies. Some fair value statutes exclude shareholder-level discounts on their face; Delaware’s excludes value arising from the merger and says nothing about discounts, leaving that to case law; Ohio excludes both control premiums and shareholder-level discounts by amendment, under a third term of art. Discounts are a level-of-value adjustment, not a feature of a standard. Whether a given standard permits one is a separate legal question, and the answer differs by jurisdiction and by proceeding within a jurisdiction.
Yes, and the mechanism is the exclusion rather than the label. Section 262(h) directs the Court of Chancery to determine fair value ‘exclusive of any element of value arising from the accomplishment or expectation of the merger …,’ which Delaware reads to strip deal synergies out of the answer. In Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128 (Del. 2019), the Supreme Court ordered judgment at $19.10 per share — ‘the deal price minus the portion of synergies left with the seller’ — against a deal price of $24.67. Note what is not being said: DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Del. 2017), declined to create a presumption that deal price is the best estimate of fair value, and Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., 177 A.3d 1 (Del. 2017), agreed there is no requirement to assign the deal price some mathematical weight. Cite Aruba for the below-deal-price point, not those two.
All of the part that sits between the enterprise and the shareholder, and Pueblo Bancorporation v. Lindoe, Inc., 63 P.3d 353 (Colo. 2003), makes the arithmetic checkable. The trial court fixed the enterprise value of the holding company once, at $666.16 per share, then applied a minority discount and a marketability discount to reach a fair value of $362.03. The Colorado Supreme Court held that fair value under the dissenters’ rights statute means the shareholder’s proportionate ownership interest in the value of the corporation, so a marketability discount may not be applied at the shareholder level, and affirmed the court of appeals. One enterprise value, found once, and the whole of the difference produced by shareholder-level adjustments whose availability was a question of statutory construction. Two cautions: certiorari was expressly limited to the marketability discount, and the court declined to decide whether an equitable exception exists.
The forum does, on a question of law, and usually before an appraiser is retained. Courts reach it as statutory interpretation: Bohac v. Benes Service Co., 310 Neb. 722, 969 N.W.2d 103 (2022), described the exercise as a multistep analysis beginning with the definition of fair value, and treated statutory interpretation as a matter of law on which an appellate court reaches an independent conclusion. Pueblo said the meaning of fair value is ‘a question of law, not a question of fact to be opined on by appraisers and decided by the trial court.’ ASA Procedural Guideline PG-2 makes the practical point for appraisers — valuation of a minority holding under fair value ‘may be very different from its value under the "fair market value" standard of value’ — while noting of itself that it ‘is not binding,’ unlike the BVS standards. This Institute maps the frameworks; counsel chooses and the appraiser opines.
Describe the proceeding and the instrument that governs it. The Institute will help you see what the definition fixes and what it leaves open.