Glossary
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Standard of Value
« Back to Glossary IndexIn business valuations, the standard of value refers to the type of value that is to be measured in the valuation engagement. While there are several types of valuation standards, four of the more common ones include fair market value, fair value, investment value and liquidation value. The selection of a specific valuation standard defines the context and assumptions underlying the determination of a business’s worth. This critical concept sets the rules for the valuation engagement, ensuring a consistent and agreed-upon framework for appraisers, stakeholders, and potential buyers. The selection of a specific standard of value profoundly influences the entire valuation process, impacting methodologies, risk assessments, and the ultimate valuation conclusion.
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