Fair value VS. Book value

The balance sheet is a financial statement that describes a company’s financial condition at a given time. It indicates what the company owns, its assets; what the company owes, its liabilities; and its net worth, its owners’ equity. In addition, fair values and book values are two metrics used to valuate the worth of balance sheet assets. And there are some difference between fair value and book value.
Meaning

Fair value:
It’s a rational and unbiased estimate of the potential market price of a good, asset, or service It’s used as a certainty of the market value of an asset (or liability) for which a market price can’t be determined (usually because there is no established market for the asset).
                                                                 



Book value:
It’s also known as “net”, a kind of stock value. Calculated by the company financial statements. It’s the accountant of shareholders’ equity, or the corresponding value of the company’s stock for the year. If you want to bring benefits shareholders in the long term, so you should consider the growth of book value. If a company can continue to increase its book value our share at a higher and rate, it will increase profit at a higher rate.

Fair value is the current price for which an asset could be sold on the opening market. But book value is the price paid for a particular asset. This price never changes so long as you own the assets. It usually represents the actual price that the owner paid for the asset.
The difference between the fair value and the book value is a potential profit or loss. There is no way to know which you ‘ll have until you sell the asset.
Fair value:
The current price, which is sold on the open market rises and falls depend on several factors that have nothing to do with the book value of your asset. It can decrease or increase after you buy the asset.
Book value:
It either stays the same or falls. The book value of an asset equals the price that you paid minus any depreciation in value of the asset. For example, assume a business bought a building for $1 million 10 years ago, and is depreciating the building on a fixed schedule of $33,000 per year over 30 years. The book value of the building today is $667,000 ($1 million minus $333,000 in depreciation)
In a word, fair value is used to calculate replacement cost. It can indicate whether your asset is priced too high or too low. Book value isn’t used when replacing assets or figuring the number of insurance needed on you current assets, as replacing assets involves buying it at market price.
Reference:
http://smallbusiness.chron.com/fair-value-vs-book-value-52428.html
https://en.wikipedia.org/wiki/Fair_value#Vs_market_value
https://www.sapling.com/5916274/fair-value-vs-book-value