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Resources for bankers

Fair Value

Banks determine fair value (the value they can reasonably place on loans) using a variety of factors. Those factors include but are not limited to the following:

  • Similar transactions for cash;
  • Secondary market values of similar financial instruments;
  • The credit standing of the debtor or guarantor
  • Prevailing interest rates;
  • Available pricing options
  • Anticipated delays in receipt of payment; and
  • Tax consequences


BC = Banking Circular
OCC = Bulletin

See also Accounting

Capital Treatment for FAS 166 and FAS 167 (ASC 860 & 810) (OCC 2010-5, February 2010), Final Rule

Accounting for Loan Swaps (BC 200, May 1985)
Provides guidance in accounting for loan swaps, principally of foreign borrowers