The (Exit) Price of a Horse: Finding the Fair Value of an Unusual Nonfinancial Asset Available to Purchase

This teaching case was born out of one of the author’s real-life hobbies.¹ A horse named Summer Fling is the nonfinancial asset used in this case. We provide useful information about the equine industry and a glossary of horse-industry terminology in Appendix A to the case which should be distributed to the students with the case itself. It is important to note that the case study places emphasis on students’ understanding of the principles of fair value measurements as they wrestle with how these principles can be applied to value an unusual nonfinancial asset. We view this case study as complementary to other cases that ask students to determine the fair value of more familiar fixed assets in simpler settings (Hughes, Lowensohn, and Tefre 2019; Gissel 2016). Once students have calculated fair values of financial and nonfinancial assets in more traditional settings, this case study is...