What is the Meaning & Definition of appraisal
In the specific area of finance, pricing or valuation or appraisal, turns out to be the name which referred to the process from which it is estimated the value that has an active, such as: companies, brands, actions, among others, or failing that a liability (debt of a company).
There are many methods of valuation, among them: value model absolute (that which determines a value through the estimation of future cash flows, expected from the asset discounted at today's value), relative valuation model (will determine the price based on market prices that hold similar assets) and options valuation model (only used on certain types of derivative financial assets).
Anyway, it is important to note that always, an optimal pricing will depend on much of the financial information of the company in question. In the case of companies that have issued public shares, financial statements, are reviewed by accountants and then supervised by a specialized entity for such need. Such a situation does not usually happen with private companies, which, in many cases, their financial statements are produced with the aim of reducing the taxable income. Meanwhile, a poor appraisal will affect a stage above or below appraisal.
On the other hand, in the area of purchase sale of properties, the word pricing is a very common term, because thus the determination of the value that such or which property is designated. A professional will come to the determination taking into account several factors such as: square meters of property, its status, its location, the value of square meter within the zone in which it is located and any other outstanding ponderable.
Article contributed by the team of collaborators.