Market value

Welcome to my “Market value.”

Market value is the most likely price at which a product or service can be sold in a free market in a competitive environment, when the parties to a transaction act reasonably, having all the necessary information, and the transaction price is not affected by any significant circumstances, that is when:https://www.blogger.com

one of the parties to the transaction is not obliged to dispose of the valuation object, and the other party is not obliged to accept the performance;

the parties to the transaction are well aware of the subject matter of the transaction and act each in their own interests;

the valuation object is represented on the open market by means of a public offer, typical for similar valuation objects;

the price of the transaction is a reasonable consideration for the object of valuation and compulsion to complete the transaction with respect to the parties to the transaction from someone else's side was not;

The payment for the valuation object is assumed to be in cash.

The following types of value are defined in the legislation regulating the appraisal activity (Federal Law No. 135-FZ of July 29, 1998 "On Valuation Activities in the Russian Federation", Federal Valuation Standards):

market price;

investment value;

liquidation value;

cadastral value.

The market value is determined by the appraiser, in particular, in the following cases:

when seizing property for state needs;

when determining the value of the outstanding shares of the company acquired by the company by the decision of the general meeting of shareholders or by the decision of the board of directors (supervisory board) of the company;

when determining the value of the collateral object, including the mortgage;

when determining the value of non-cash deposits in the authorized (share) capital;

when determining the value of the debtor's property during bankruptcy proceedings;

when determining the value of property received free of charge.

The market value is determined by appraisers carrying out their activities in accordance with the RF Law "On appraisal activity"

A cost approach is a set of methods for estimating the value of an evaluation object based on determining the costs necessary to restore or replace an object of valuation, taking into account its wear and tear.

The costs of reproduction of the evaluation object are the costs necessary to create an exact copy of the evaluation object using the material and technology assessments used to create the object. The costs of replacing the valuation object are the costs necessary to create a similar facility using the materials and technologies used at the valuation date.

Comparative (market) approach - a set of methods for assessing the value of the valuation object, based on the comparison of the valuation object with similar objects, in relation to which there is information on the prices of transactions with them.

The object - the analog of the valuation object for the purposes of valuation - is an object that is similar to the object of assessment for the main economic, material, technical and other characteristics that determine its value.

Income approach - a set of methods for assessing the value of the object of evaluation, based on the definition of expected revenues from the valuation object.

The process of valuing a jewelry with precious stones includes estimating (1) the value of precious metal, (2) stones, and (3) labor costs for the manufacture of this product.

When determining the market price, it is first necessary to conduct a gemological examination, which includes the diagnosis of insertions, the determination of their characteristics. So, for example, how the difference in the market value of natural precious stones and their synthetic analogs are enormous. It is also necessary to distinguish the method of making jewelry. For example, handmade jewelry is much more expensive than similar, manufactured by casting.

Literature [edit] edit the code]

Federal Law "On Valuation Activities in the Russian Federation" of July 29, 1998, No. 135 - FZ, "Rossiyskaya Gazeta" No. 148 - FZ of 06.08.1998.

Valuation standards that are mandatory for application by valuation entities. aidarkin.sfedu.ru (Rus.)

VN Denisov, Schepot'ev AV, Yashin SA Pricing: a study guide / VN Denisov, Schepot'ev AV, Yashin SA - Tula: Tula branch of RGTEU, 2011. - 192 from.

Dronova ND Estimation of the market value of jewelry and precious stones: textbook.-M .: Business, 2001

Schepot'ev, A.V. Methodology for identifying and evaluating "hidden" and "imaginary" assets and liabilities. - M: Just inform, 2009. - 144 p.

Schepotyev AV Economic and legal basis for the emergence of a negative value of property value // Law and Economics. 2011. - No. 1. P. 14 – 17

Price - the amount of money in exchange for which the seller is willing to transfer (sell) a unit of goods. In fact, the price is the coefficient of exchange of a specific commodity for money. The concept of price is a fundamental economic category.

The value of the ratio (proportion) in the voluntary exchange of goods is called cost. Therefore, the price is the value of a unit of goods expressed in money, or the monetary value of a unit of the commodity, or the monetary expression of value.

In everyday speech, the price is often synonymous with the value of the product (for example, "how many matches are there?") And these words can mutually replace each other.

Aristotle has two concepts of price: price is a category of exchange that serves the circulation of surplus (everything that is not necessary for the existence and reproduction of man). On the other hand, it is an expression of untruthful wealth.

In Thomas Aquinas "Fair Price" - a price that allows you to recover costs. On the other hand, Thomas Aquinas says that the price should be differentiated depending on how much the buyer is close to God. That is, for representatives of the church estate price should be lower than for the peasant.

Political Economy Price Concepts [edit] edit the code]

Adam Smith and the subsequent classical political economy school (David Ricardo, Karl Marx) considered the contradictory dual nature of price: on the one hand, price is a monetary expression of objective value, the value of which depends on the expenditure of working time; on the other hand, the price depends on subjective needs assessments, which leads to changes in the size of demand and supply. David Ricardo formulated it most clearly:

But if we take labor as the basis for the value of goods, then it does not follow from this that we deny the occasional and temporary deviations of the real or market price of commodities from their primary and natural price.

- D. Ricardo. The beginning of political economy and taxation. CHAPTER IV On the natural and market price.

Marx mainly investigated the objective factors that affect the cost - "socially necessary labor costs", as well as intra- and inter-industry competition. His theory of surplus value explains the possibility of making a profit while maintaining the principle of value equivalence and voluntariness at all stages of production and exchange of goods. This allowed us to better understand the objective side of the price.

Jean Baptiste Sei, developing the ideas of A. Smith, focused on the utility of the product and demand, rather than on costs and offers. He considered the price to be a subjective evaluation of the utility of the good. The price is a "sacrifice" for the buyer, a monetary expression of the alternative value ("subjective value").

The Austrian school abandoned the objective concept of value and concentrated on subjective preferences, which are reflected in prices (marginal utility theory). As part of these views, the price is not a monetary reflection of value, it reflects the balance of subjective estimates by the seller and the buyer of the marginal utility of the goods.

The definitions of the concept of "price" strongly depend on which economic theory the authors prefer:

Monetary value of value;

Monetary expression of the value of goods (services) in the economic exchange;

Monetary expression of the system of pricing factors;

The amount of money (goods, services) for which the seller is ready to sell, and the buyer is ready to buy 1 unit of goods (services);

One of the elements of the market (along with demand, supply, and competition);

Market competition tool;

Characteristics of the goods on the market;

The price of a thing or service consists of the salaries of some chain of workers. In the price, there are no other terms except wages.

The following pricing factors distinguish.

Expenses;

Value of goods (services);

Demand and its elasticity;

Competition;

State influence.

There are two main approaches to pricing: cost and value.

The cost approach combines a group of pricing methods that take, as a starting point, the actual costs of the firm to produce and organize the sale of the goods. In the framework of the cost approach, certain methods of calculating prices are singled out, and the prices determined in this way are called "prices oriented to costs."

In this group of methods of calculating prices are allocated:

Pricing methods are based on the principle of "costs plus profits". Costs can be full, average, marginal, standard or standard costs (full, average, marginal costs are related to actual production, standard and regulatory are cut off from the production of the firm, they are taken under normal production conditions - used when costs need to be limited). As a profit most often take an average industry, unless otherwise specified by legislation (there is a "cape" for costs) - there are goods for which the "cape" is regulated. But there are other methods of determining profit - for example, the target profit. If an enterprise, due to a certain situation on the market, can influence the price (convince or force the market), then it can set profit (according to the break-even point model).

Methods of element-wise calculation of prices. When these methods are used, the main categories of costs are calculated (for example, direct costs for materials, wages), and all other cost categories are calculated as a percentage of the main indicators (the indicator itself is chosen.