ADS BY GOOGLE
Concepts and meanings of market value
Market value meaning
What is market value?The market value is the value of a product or service determined by the supply and demand of the market, since it is the net amount that a seller could obtain from the sale of said product, good or service in standard conditions of trading in the market, therefore, sometimes also known as the open market value, although this term has a different definition in different standards.
According to the international valuation standards (http://www.ivsc.org), the market value is defined as "the estimated amount for which a property could be exchanged, at the date of valuation between a buyer and a seller in a transaction under conditions of full competition where the parties act with knowledge and without coercion".
The market value is a different concept to the of market price, that is the price which may perform transactions, while the market value is the real underlying value, which are not always equal. The concept of market value is most commonly used in inefficient markets or in situations of imbalance where market prices do not reflect the real market value.
The market value is also different from fair value, because fair value depends on the two parties involved in a transaction while that market value does not. Fair value requires an assessment of the price that is fair between two specific taking into account parts respectas them advantages and disadvantages that each party will win with the transaction. But the market value can be set to these criteria, you don't have to do it necessarily always.
The market value and the theories of marketThere are different theories that try to explain how it determines the market value. The market value is a concept used by individuals and companies as a business tool, and is therefore subjective perception of the seller and buyer since each can take several parameters into consideration.
The market price can be considered as one that people are willing to pay for something in a given place and time is important to point out the importance of the range of time and place where buyers and sellers are. Is considered a local, regional, national or international market?. In this sense, the Local market value and the market value of instant is exactly the same as the Local market price. If many people want the same product but there is enough for everyone who wants it, the market value and market price are identical. It is not correct to think that something has a pos value Yes only since, in economic terms, the value depends on transactions so that if there are no transactions there is no value or there are zero, although there may be an estimate of the value or expected sale price.
Overvaluation and undervaluationThese two words are used to refer to a price that is too high (overstatement) or too low (underestimation) with respect to the expectations of an individual or group. It is a form of comparison between personal expectations and some tool of comparison of the market value. Therefore, the overvaluation or undervaluation are valid if they are relative to the comparison used in origin, but are totally irrational without this comparative basis. In fact, often the overvaluation and undervaluation are subjective appreciations without a valid reference.
Market value definitionReplacement cost, either by direct purchase or production as the case. This can be drawn from the quotations that appear in specialized publications, whether it's articles or goods traded on the market, or quotes and prices of invoices from suppliers, among others. The value of titles or values prevailing in the market at any given time, depending on your time and days elapsed since their issuance. For its calculation the rate of return of each issue is considered by the time elapsed since their issuance until such time that you want to calculate, in other words, it is the placement value set by the interests that are generated daily from each of the emissions in circulation.
Market value conceptIt is the net amount that could reasonably expected to receive an offeror by the exchange of a good or service on the date of valuation, through an adequate commercialization, and assuming that there is at least one applicant with potential economic, properly informed of the characteristics of the product, and that both supply and demand, acting freely and with a specific objective.
In cost accounting market value is used to determine the joint costs to individual products, in this case the value of the market at the point of separation and methods net realisable value method which are two methods that are based on the market value to allocate joint costs to individual products.
What is market valueThe market value is the amount that is allocated to a good or product-specific understanding as such that sum of money that a seller could obtain by the same standards of a stock market conditions.
In economics, the economic or financial value of a product, good or service is determined according to different theories and different indicators. Among these, the market value is the net amount that a seller could receive for the sale of a good piece of furniture or building (or other) under normal economic transaction in the market. That is, assuming that marketing is it favors, that there is a buyer with economic potential and that both may act freely and without particular interests.
As we said, for economic theory the value of an asset can be, as Marxist, understood the theory the amount needed for the production of the same with a value in use at a given level of technological development. The price is derived from the value and then there are always fluctuations about the same. Theories necoclasicas, on the other hand, understand the value as a subjective indicator that has more to do with the valuation of the consuming public by the good. I.e., the market value of an asset should not save necessary relationship with the cost of production, that is freely determined by the economic fluctuation and the degree of interest of the purchaser.
Be that as it may, the market value tends to be a fluctuating value, to the extent that it depends on several variables which are in constant alteration. Among them, it is interdependent with the becoming of an economy in particular, for example, the values of existing inflation and devaluation. At any given time, in addition, an object either can have more value than another (for example, precious stones), whereas with the evolution and progress of world economies this can lose its value of Exchange in market.