Define valuation in business

Accounting Dec 18, 2020

Define valuation in business.

Expert Solution

Valuation is a term that is used in business to refer to process or set of procedures that are used to estimate economic value of owners interest in business. Some of assets that undergo valuation include securities like ;

Debentures
Bonds
Preference shares.

Importance of valuation include;

Valuation of securities is important when company is going into liquidation.
Valuation of securities is important when securities are to be used as collateral of a loan.
The company is able to know its value when all its asset are valued.

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