Why does the Board think fair value should reflect an exit price notion?
An exit price of an asset or liability embodies expectations about the future cash inflows and outflows associated with the asset or liability from the perspective of market participants at the measurement date. An entity generates cash inflows from an asset by using it or by selling it. Even if an entity intends to generate cash inflows from an asset by using it rather than by selling it, an exit price embodies expectations of the cash flows that would arise for a market participant holding the asset. Thus, the Board believes that an exit price is always a relevant definition of fair value for assets, regardless of whether an entity intends to use an asset or to sell it. Similarly, a liability gives rise to outflows of cash (or other economic resources) as an entity fulfils the liability over time or when it transfers the liability to another party. Even if an entity intends to fulfil the liability over time, an exit price embodies expectations about cash outflows because a market par