Value is just Value, right?
Here we look at some key definitions and different types of value. This is by no means exhaustive but it can give you an idea of where value is more than a straight forward calculation or method.
The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.(IVS)
The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
An additional element of value created by the combination of two or more interests where the value of the combined interest is worth more than the sum of the original interests.
An amount that reflects particular attributes of an asset that are only of value to a special purchaser.
The value of an asset that has reached the end of its economic life for the purpose it was made. The asset may still have value for an alternative use or for recycling
The estimated value of an investment property at the end of a period during which the rental income is either above or below the market rent.
1. The anticipated value of an asset at the expiration of its useful life.
See also: Salvage Value
2. IFRS definition (IAS16): “The estimated amount that an entity would currently obtain from disposal of an asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.”
The application of the IFRS definition is described in IVS 300 Valuations for Financial Reporting.
The value, as of a specified date, of a future payment or series of future payments discounted to the specified date (or to time period zero) at an appropriate discount rate.
Net Present Value
The value, as of a specified date, of future cash inflows less all cash outflows (including the cost of investment) calculated using an appropriate discount rate.
Net Book Value
In relation to a business enterprise: The difference between total assets (net of accumulated depreciation, depletion, and amortization) and total liabilities as they appear on the balance sheet.
In relation to a specific asset: The capitalized cost less accumulated amortization or depreciation as it appears on the books of account of the business enterprise.
The net amount that would be realized if a business is discontinued and its assets are sold individually. The appropriate bases of value and any appropriate additional qualifying assumptions should also be stated.
The value of an asset to the owner or a prospective owner for individual investment or operational objectives.
A valuation approach that provides an indication of value by converting future cash flows to a single current capital value.
The initial income from an investment divided by the price paid for the investment expressed as a percentage.
See also: All Risks Yield; Reversionary Yield; Yield; Yield to Maturity
A non-monetary asset that manifests itself by its economic properties. It does not have physical substance but grants rights and economic benefits to its owner.
Internal Rate of Return
The discount rate at which the present value of the future cash flows of the investment equals the acquisition cost of the investment.
A valuer who is not employed by the owner or manager of an asset.
The value of a business to all of its shareholders
The total value of the equity in a business plus the value of its debt or debt-related liabilities, minus any cash or cash equivalents available to meet those liabilities.
Discounted Cash Flow Method
A method within the income approach in which a discount rate is applied to future expected income streams to estimate the present value
Basis of Value
A statement of the fundamental measurement assumptions of a valuation.
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- RT @lkshields: Residential Tenancies (Amendment) (No. 2) Bill 2012, as amended in the Select sub-Committee, 30 May 2013 http://t.co/2lBXcGf…