Value Blog

Valuable Answers to Your Business Valuation Questions

06 Apr

Where Do I Start? What is Value?

Posted in General valuation topics on 06.04.09

The first step in the valuation process is to understand the concept of value. Value is often thought of as a definite number. This is a common misconception. Not only can value be expressed in terms of a range, different types of value create a range of values.

Each person’s perspective, goals and objectives can lead him or her to arrive at a different value. There are different types of value, which valuators refer to as standards of value. Depending upon the purpose of the valuation, different types of value may be relevant.

Most people are familiar with the term fair market value. This type of value is defined as what a willing buyer will pay a willing selling, both being reasonably informed of all relevant facts and entering into the transaction freely. Fair market value is used for estate and gift tax valuations. Value for litigation purposes can be either based on fair market value or fair value. There are other types of value as well.

One of the first steps in the valuation process is identifying the appropriate type of value for the intended purposes. Florida Business Valuation Group is available to assist you in determining the appropriate type of value for your circumstances. For more information on standards of value and the valuation process, please click here.

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