Talk:Value-in-use

It's not nonsense. If it's correct, it may possibly be worth an article, or may possibly be worth transwiki-ing to Wiktionary. --Coppertwig (talk) 00:51, 24 November 2007 (UTC)[reply]

It's the first of a series of articles I'm writing on various types of value (investment, liquidation, etc.). I found recently that attorneys and paralegals uses wikipedia for research on these questions in litigation matters. The methods for determing each of these values differ from one another, and so it makes organizational sense (at least to me) to have a series of interlocked articles for this sort of research.

Admittedly, this is just a stub, and I'll be back shortly to flesh it out. OK?Thesurveyor (talk) 01:01, 24 November 2007 (UTC)[reply]

I've been following on-and-off your various contributions to appraisal/valuation on Wikipedia. I think you're doing a wonderful job.

I'd like to add as per the definitions: If you carefully study the latest edition of IVS 2 you'll find the definitions there are unbeatable. In a way, they've given up on using fair value or value-in-use, which are really accounting definitions, not appraisal/valuation terms. Notice too that the way these latter are defined is by means of some operational criterion. The equivalent valuation terms are now (according to IVS): Market Value and Investment Value. These are defined more abstractly than fair value or value-in-use and are much more useful in a valuation context. Later on I'll try to add these insights to the entries themselves. Tkeu (talk) 15:52, 25 November 2007 (UTC)[reply]

Well, first, thanks for the kind comments. I wish I had more time to devote to this. Second, I would concur that the IVS definitions and the definitions as applied in the U.S. are somewhat at loggerheads with one another. In the U.S., "value in use" or "use value" is most commonly applied when one of two conditions apply. First, for tax purposes (both federal and sometimes local property or excise), farmland or timberland may be valued at use value rather than market value because it is presumed that use value will be lower than market value. Second, in situations where some exogenous factor (such as economic obsolescence or contamination) places a limitation on the application of the property to what would otherwise be its highest-and-best-use, then the resulting "as-is" value is often referred to as a use value or value-in-use. (See, for example, USPAP Advisory Opinion 9 after the October, 2002, update.) On the other hand, when a particular user may enjoy special benefits not available to the market as a whole, the property may have an investment value to that user, and that investment value is presumed (at least in the U.S.) to be higher than the value which would otherwise be arrived at in a market value appraisal. This is one of those areas in which U.S. appraisal practice and the IVS are still unreconciled. Thesurveyor 21:36, 1 December 2007 (UTC)[reply]

Interesting and illuminating. I've never thought of the agricultural value (which is the terminology used in Israel) of farmland as value-in-use, but of course that's what it is. Tkeu 22:26, 1 December 2007 (UTC)[reply]

Let me add: Some of what you term use value is what is referred to in the RICS Red Book as EUV - Existing Use Value. This is a measure of Market Value subject to some constraint, eg the value of a building disregarding its highest and best use.

This plethora of terms can be very bewildering, which I think goes to show the importance of international standards. Tkeu 22:48, 1 December 2007 (UTC)[reply]

re: importance of international standards. I would concur, but perhaps not for the same reasons.... Many large portfolios transcend national boundaries, and portfolio management or sale requires valuation. One challenge is that valuation using different standards causes some difficulties with understanding the integrated value of the portfolio. Unfortunately, so much of valuation in the U.S. is steeped in U.S. history. For example, the federal financing definition of Market Value (the one published in the Federal Register) derives ultimately from language proffered by the Virginia House of Burgesses back in colonial days in their instructions to property tax assessors. I've taken the liberty of adding a section on the IVS/USPAP reconciliation efforts within the USPAP article. Thesurveyor 22:09, 2 December 2007 (UTC)[reply]