Principal market definition
/What is a Principal Market?
A principal market is that market having the greatest volume and activity level for the sale of certain assets or liabilities. The market from which a fair value is derived should be the principal market for an asset or liability, since the greater transaction volume associated with such a market should presumably result in the best prices for the seller. The market in which a business normally sells the asset type in question or settles liabilities is assumed to be the principal market. Thus, the designation of a principal market is from the perspective of the reporting entity; a different market might be the principal market for a competitor.
The price in the principal market that is used to measure fair value is not to be adjusted for transaction costs. However, the fair value derived in a principal market should be adjusted for the cost required to transport an asset from its current location to that market.