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Value Definition in An Art Appraisal

Posted on Tuesday, March 17, 2009 in Uncategorized

From Chinese Art Appraisal.com

Fair Market Value

The price at which the property would change hands between a willing  buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Market Value

The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer.

Replacement Value

Replacement Value is the price it would cost to replace an item with one of similar quality purchased in the most appropriate marketplace within a limited amount of time. Usually, this is the value used for insurance purposes or collecting needs. It is evaluated in essentially three ways: New Replacement Value, when the object is still available; Second-Hand Replacement Value, reflecting the current second hand replacement cost of a similar article of equivalent quality and condition; and Facsimile Value reflecting the cost of recreating a facsimile of the original in reasonably equal material and quality of production.

Liquidation Value

Liquidation value is the price realized in a sale under forced or limiting conditions and under time constraints. The action may be initiated by the owner or crediting institution.

Actual Cash Value

The price be necessary to replace a property with another of similar age, quality, origin, appearance, size, and condition, within a reasonable length of time in an appropriate and relevant market. (This definition encompasses the concept of “as is” or “with or without restoration.”) It is the market value of a property less all forms of depreciation.

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