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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Valuation


Synonyms:appraisement, assessment, cost, estimate, worth
Filed Under: financial-banking, insurance, investments, real-estate
Tags: banking, insurance, investment, realty
 

Definition of valuation

valuation
1. The act or process of assessing value or price of a property through an appraisal.
2. The act or process of measuring the present net worth of an asset or company. Many factors are taken into consideration during the stages of valuation, ranging from the objective to the subjective. For example, an asset like a car has a specific and easily determined market value, but in addition to tangible assets like property, the makeup of company's capital structure, and expected future earnings, a business may have intangibles that must be taken into account, such as the quality of the businesses management and their employees.

Related Terms and Acronyms:

  • appraisal   An estimate of the market value of a piece of real estate made by a competent professional who knows local real estate prices and markets.
  • fair market value (FMV)   The highest price that a buyer would pay for a property and the lowest price a seller is willing to accept.
  • future value of an annuity (FVA)   The value of an annuity at some future date.
  • intangible asset   Non-physical resources or rights to other assets. Patents, goodwill, permits and computer programs are examples of intangible assets.
  • intangible property   Property that does not have value itself, but represents something else. Stocks, bonds and franchises are examples of intangible property. Business furniture and equipment are examples of tangible personal property.
  • market value (MV)   Also known as "Fair Market Value." The estimated value of a property which a seller could expect to receive under normal conditions.
  • median price   In a given area, the amount paid for a house in which half of the houses in that area sell for less and half sell for more.
  • underinsurance   When the amount of insurance coverage on an asset is less than the asset's full value.
  • useful life   The number of years depreciable business property is expected to be productive and in use.
  • valuation clause   A clause in an insurance contract that states how much an insurer is willing to pay for an asset after an insured event.

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