Actual Cash Value (ACV) is an insurance term referring to the amount equivalent to the replacement cost of damaged or lost property, minus depreciation. It is a measure sometimes used as a substitute for market value in insurance claims.
An arm's-length transaction refers to a deal where the parties involved act independently and in their own self-interest, ensuring fairness and equal standing for all involved.
The 'Asked Price' is the price a property owner sets for their property when they intend to sell it. It represents the amount they are seeking from buyers. The term 'Asked Price' is commonly used in real estate transactions and is often seen as the initial price point which may be negotiated.
The Assessment Ratio is the ratio of the assessed value of a property to its market value, often used to determine property taxes. It is a vital aspect in the evaluation of real estate for taxation purposes.
An adjustment to the book value of an asset to reflect its current market value; seldom allowed under Generally Accepted Accounting Principles (GAAP).
A government entity whose purpose is to ensure uniform property tax assessments. It operates at both local and state levels to review and assure fair assessments.
Cash Equivalence refers to the market value of an item if it were to be sold for cash. In real estate, this often represents the true value of a property, which can differ from the stated selling price due to various financial arrangements.
An amount paid above the average market value of shares to gain enough ownership to set policies, direct operations, and make decisions for a business. Contrast with Minority Discount.
The cost approach is a method of appraising property based on summing the reproduction cost of improvements, minus depreciation, to the market value of the site.
Current-value accounting is a method that values assets based on their current market value, taking into account changes in specific prices rather than general price levels. This technique is essential for providing a more precise and timely reflection of an entity's financial situation.
The process of systematically reducing the recorded cost of a tangible fixed asset over its useful life.
Economic goods are commodities and products that require effort and resources, and are available at a price in the market. They are distinct from freely available goods or those with no utility.
Economic obsolescence in real estate refers to the loss of property value due to external factors outside the property itself. For instance, an expensive private home may lose value if an industrial plant is built nearby. This factor must be considered during the property's appraisal.
A comprehensive metric frequently used to measure the value of a business in its entirety, incorporating both equity and debt.
Fair Market Value (FMV) refers to the price at which an asset or service would change hands between a willing buyer and a willing seller, both having adequate information about the asset or service and under no compulsion to buy or sell.
A forced sale is an urgent sale of assets, typically conducted under significant pressure or compulsion, where the seller has limited opportunity to obtain a fair market value. Examples include sales conducted through foreclosure, bankruptcy, or instances of duress.
The Free Asset Ratio is a key metric in the insurance industry, quantifying the market value of an insurance company's assets relative to its liabilities. It is used to gauge the financial health and stability of the insurer.
A term used in accounting to describe a fixed asset to which all allowable depreciation has been charged according to accounting or tax laws. The asset is carried on the books at its residual value, although its market value may be higher or lower.
Gross Domestic Product (GDP) is the market value of all goods and services produced within a country during a specific period, usually annually or quarterly. It serves as a comprehensive measure of national economic activity and health.
A Hundred-Percent Location, also known as a One-Hundred-Percent Location, refers to a prime area in a city or a town that garners the highest market values and foot traffic. These locations are in high demand due to their strategic positioning, offering businesses substantial visibility and profitability prospects.
Insurable value refers to the cost of total replacement of destructible improvements to a property; it is often based on replacement cost rather than market value.
Intellectual capital is a complex and multifaceted concept that includes human knowledge, information systems, brand names, and reputation. It is crucial for understanding the true value and performance of a company.
Investment value represents the estimated worth of an investment to a specific individual or institutional investor. It can differ from market value based on the unique circumstances and requirements of the investor.
Large-cap stocks, also known as big-cap stocks, are shares of companies with a large market capitalization, typically $5 billion or more.
The price a seller puts on a home when it is placed on the market. The listing price, also known as the asking price, is generally considered a starting point for negotiations between the seller and a prospective buyer.
The Lower of Cost or Market (LCM) accounting method involves recording inventory at its historical cost but writing it down to market value if that is lower. Market value is defined as replacement cost, capped by net realizable value (NRV) and cannot be less than NRV minus a normal profit margin.
The Market Price to Book Ratio is a financial metric used to compare the market value of a company's stock to its book value, offering insights into how the market perceives the value of the company’s net assets.
Market value is a critical financial metric, reflecting the current price at which an asset or service can be bought or sold in a marketplace. It is widely used in trading and investing to determine the 'fair price' of a property, stock, or currency.
Market Value is a financial metric that measures the value of an asset or company determined by the current market price of its shares or assets. Distinguished from book value, it reflects real-time valuation and investor sentiment.
A provision in property insurance that determines the reimbursement amount for damaged or destroyed property based on the price a willing buyer would pay to a willing seller, rather than the property's actual cash value.
Market value is the price a willing buyer would pay for property purchased from a willing seller, while actual cash value is the replacement cost of damaged or destroyed property minus depreciation and obsolescence.
An individual whose overall assets exceed $1 million but are not liquid cash. These assets could be in the form of securities, real estate, or other investments.
A minority discount is a reduction from the market value of an asset due to the lack of control associated with a minority interest in a business. It reflects the diminished ability of minority interest owners to influence or direct business operations.
Negative equity occurs when the value of an asset falls below the outstanding balance borrowed against it, often seen in property valuations affected by economic downturns.
Nominal price refers to a minimal or face value of a security at issuance, often not reflective of the current market value.
Objective Value is a term used to describe the value of an asset as determined by market forces, rather than subjective measures like personal opinions or intrinsic valuations.
OMV refers to the value of an asset or property in the open market, where a willing buyer and a willing seller, both knowledgeable about the item, complete a transaction without undue pressure.
Open Market Value (OMV), also known as Market Value, refers to the estimated price at which an asset or property would trade in a competitive auction setting, where the conditions for a fair sale are met, and the parties involved are well-informed and willing.
An overimprovement occurs when a property improvement is valued significantly higher than the land it sits on, affecting its market value and efficiency. This commonly entails disproportionately expensive enhancements relative to the land’s inherent or potential value.
Owners' Equity refers to the beneficial interest in an organization held by its owners. It is the sum of its total assets less its total liabilities.
The Price-Earnings (P/E) Ratio signifies the price of a stock divided by its earnings per share (EPS), acting as a multiple. It offers insights into market expectations regarding a company’s future earning power.
Pricey refers to products or services offered at prices at or near the top of what the market will bear, or in investment terms, offering or bidding prices that are significantly above or below the current market value.
A reappraisal lease is a type of lease agreement where the rental level is periodically reviewed by independent appraisers to ensure the lease payments reflect the current market value.
The highest price a buyer can pay and still achieve their primary objectives, such as keeping monthly payments affordable or paying no more than the market value for the property.
The revaluation clause, also referred to as a reappraisal lease, is a provision in a lease agreement that allows for periodic reassessment of the rental value of the leased property. This clause is often used to ensure that rental payments reflect the current market value of the property, protecting the interests of both the landlord and the tenant.
A reverse split is a corporate action in which a company reduces the number of its outstanding shares while keeping the market value the same immediately after the reverse split as it was before. Each share will be worth more post-reverse split.
The basic economic principle that most resources, goods, and services are available in limited quantities, requiring allocation based on willingness to pay the price set by supply and demand in a market economy.
Simple yield is the return equal to the nominal dollar interest divided by the market value (price) of a bond. It is an approximate, simplified rate reflecting the cost to the debtor and the return to the holder of a debt instrument.
A stock repurchase plan, also known as a share buyback, is a program by which a corporation buys back its own shares from the open market. Typically deployed when shares are perceived as undervalued, this practice reduces the number of shares outstanding, thus raising earnings per share (EPS) and potentially increasing the market value of the remaining shares.
A stock split increases the number of a corporation's outstanding shares while making the stock more marketable, without altering shareholders' equity or the overall market value at the time of the split.
Taxable value refers to the assessed value of a property or other asset, which is used to determine the amount of a tax liability. It's often a percentage of the property's market value and is used by tax authorities to calculate the proper amount of tax due.
A periodic inheritance tax charge on most forms of discretionary trusts, structured to balance the lack of generational transfer taxes.
Tobin's Q is a ratio developed by Nobel laureate James Tobin to understand the relationship between the market value and replacement value of a firm's assets.
Tobin's Q Ratio, devised by US economic analyst James Tobin, measures the impact of intangible assets on business value by comparing the market value of a business to the replacement cost of its assets.
The unexpensed portion of the amount by which the price paid for a security exceeded its par value with bonds or preferred stock, or its market value with common stock.
Underpay refers to a scenario in which individuals receive wages that are considered insufficient or below the market value for the job or procedure they perform. This can be due to several factors, including market dynamics, organizational policies, or perceived worth.
An undervalued security is one that is selling below its liquidation value or the market value that analysts believe it deserves. Factors for undervaluation may include an unfavored industry, lack of company recognition, or an erratic earnings history.
Unrealized profit/loss refers to the profit or loss that exists on paper due to holding assets, rather than actually selling or otherwise disposing them to capture the gain or loss in cash.
Value in exchange refers to the amount of other goods and services for which a unit of a specific good can be exchanged in a market. This is often represented by the money price of the good.
A write-down is a reduction in the book value of an asset on a company's financial statements, typically due to a decline in the asset's market value. This accounting procedure adjusts the carrying value of an asset to reflect its current estimated recoverable amount.
