Value-in-use is the

net present value The net present value (NPV) or net present worth (NPW) applies to a series of cash flows occurring at different times. The present value of a cash flow depends on the interval of time between now and the cash flow. It also depends on the discount ...

(NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use. In the U.S., it is generally estimated at a use which is less than highest-and-best use, and therefore it is generally lower than market value. When a particular user enjoys special benefits, such as extraordinary financing, agglomeration benefits, or grandfathered zoning, then the value may be higher than market value, and the value is considered to be an

investment value Investment value is the value of a property to a particular investor. In the U.S. and U.K., it is equal to market value for the investor who has the capacity to put the property to good use—its highest-and-best-use, its most valuable use. For oth ...

International Valuation Standards

The 2007 edition of International Valuation Standards (IVS 2007) re-states the

International Financial Reporting Standards International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's f ...

definition of 'value-in-use', which would allow for either a higher value than market value or a lower value than market value: :''Value in Use'' The present value of the future cash flows expected to be derived from an asset or a cash-generating unit. As defined in IVS2,

is the valuation equivalent of the

accountancy Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "langua ...

concept of value-in-use. Whereas

IFRS International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's fina ...

s define the accountancy concepts of

fair value In accounting and in most schools of economic thought, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. The derivation takes into account such objective factors as the costs associated wi ...

and value-in-use in operational terms, IVSs define Market Value and Investment Value by way of generalised definitions.

References

Real estate valuation Valuation (finance) Mortgage {{finance-stub