# Commission Regulation (EC) No 2086/2004 of 19 November 2004 amending Regulation (EC) No 1725/2003 on the adoption of certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards the insertion of IAS 39 (Text with EEA relevance), Division: Fair Value Measurement Considerations (paragraphs 48 and 49)

Extent: E+W+S+N.I.

AG69. Underlying the definition of fair value is a presumption that an entity is a going concern without any intention or need to liquidate, to curtail materially the scale of its operations or to undertake a transaction on adverse terms. Fair value is not, therefore, the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distress sale. However, fair value reflects the credit quality of the instrument.
AG70. This Standard uses the terms ‘bid price’ and ‘asking price’ (sometimes referred to as ‘current offer price’) in the context of quoted market prices, and the term ‘the bid-ask spread’ to include only transaction costs. Other adjustments to arrive at fair value (eg for counterparty credit risk) are not included in the term ‘bid-ask spread’.

---
Source: https://www.legislation.gov.uk/eur/2004/2086/annex/3/division/6/division/3 (the official version)
Page: https://openlegislation.uk/eu-regulation-2004-2086/annex-3/division-6/division-3
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.