Value

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Value

The estimated or appraised worth of any object or property, calculated in money.

The word value has many meanings and may be used in different senses. Because value is usually a relative term, its true meaning must be determined by the context in which it appears.

Value sometimes expresses the inherent usefulness of an object and sometimes the power of purchasing other goods with it. The first is called value in use, the latter value in exchange. Value in use is the utility of an object in satisfying, directly or indirectly, the needs or desires of human beings. Value in exchange is the amount of commodities, commonly represented by money, for which a thing can be exchanged in an open market. This concept is usually referred to as market value.

Courts have frequently used the word value without any clear indication of whether it referred to value in use or market value. Generally, however, the courts and parties in civil actions are concerned with market value. Though courts may refer to salable value, actual value, fair value, reasonable value, and cash value, these terms are synonymous with market value.

Value is also employed in various phrases in business and commercial usage. The phrase actual cash value is used in insurance to signify the cost of purchasing new replacement property less normal depreciation, though it may also be determined by the current market value of similar property or by the cost of replacing or repairing the property. Cash surrender value is used in life insurance to refer to the amount that the insurer will pay the policyholder if the policy is canceled before the death of the insured.

Book value is the value at which the assets of a business are carried on the company's books. The book value of a fixed asset is arrived at by subtracting accumulated depreciation from the cost of the asset. Book value may also refer to the net worth of a business, which is calculated by subtracting liabilities from assets. Liquidation value is the value of a business or an asset when it is sold other than in the ordinary course of business, as in the liquidation of a business.

In the Stock Market, par value is the nominal value of stock; it is calculated by dividing the total stated capital stock by the number of shares authorized. Stated value is the value of no par stock established by the corporation as constituting the capital of the corporation.

Cross-references

Fair Market Value.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

VALUE, common law. This term has two different meanings. It sometimes expresses the utility of an object, and some times the power of purchasing other good with it. The first may be called value in use, the latter value in exchange.
     2. Value differs from price. The latter is applied to live cattle and animals; in a declaration, therefore, for taking cattle, they ought to be said to be of such a price; and in a declaration for taking dead chattels or those which never had life, it ought to lay them to be of such a value. 2 Lilly's Ab. 620.

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.
References in periodicals archive ?
Thus, for purposes of valuing a family business, this intangible value must be disaggregated and analyzed.
In Custom Chrome, the Ninth Circuit stated that,"[t]he problem in valuing the warrants stems from the combination of the general speculative nature of options aid the related difficulty of determining precisely what effect options granted for OID have on a core loan transaction." The court concluded that any well-established and reliable method for determining the value of options may be used in determining the warrants' value, such as (1) comparing the total debt instrument's value to the published values of comparable debt instruments of other issuers; (2) estimating as a multiple of earnings before interest and taxes the present value of the portion of the company that may be purchased by exercise of the options; and (3) using the Black-Scholes method.
* CPAs CAN HELP COMPANIES CHOOSE FROM AMONG several methods for valuing IP assets.
* Valuing compensation expense is not simply a matter of plugging the "right" numbers into a model.
One is an enhanced BSM model; the second, a binomial tree model, is especially useful in valuing ESOs with more complex features such as indexed and performance-based options.
Specifically, with respect to its parts inventory, Mountain State disclosed its intent to (1) value its inventory "at actual cost regardless of market value" (2) use the dollar-value LIFO method for its parts inventory, (3) use the link-chain method of calculating the price index for its parts inventory (which it was pooling in one LIFO pool) and (4) use the "most recent purchases method" of valuing its LIFO increments.
When valuing businesses using market multiples, however, you should avoid simplistic reliance on averages.
1958), the court determined that it was not appropriate to use replacement cost as a basis for valuing inventory acquired in a corporate liquidation when no readily available replacement market existed and it would take at least six months to replace the inventory.
The Internal Revenue Service guidelines for valuing stock in closely held corporations are very general.
KIRK: I want to switch to the appropriateness of valuing the asset side and not the liabilities side.
However, rather than valuing, for example, an oil company as a whole, each individual well is valued using a discounted cash flow method.
PBGC used 6.5% as the interest rate for valuing immediate annuities in May 1992, a rate that corresponds with set C in the tables.