Fair market value is the standard or fair market price of a property at the time of selling or auctioning in the open market.
This price should abide by some conditions like both party i.e. seller & buyer ready for this auction without any pressure and with their own interest, both agree on the price, the payment duration is well & good for the buyer etc. These conditions must be fulfilled for further valuation of the asset.
Here are some other accounting terms we have compiled. Click to read.