marketvalued

Marketvalued is a nonstandard term used in finance and accounting to describe assets, liabilities, or entities whose values are determined primarily by current market prices rather than historical cost or subjective estimates. In practice, market-valued measurements reflect the price at which an asset could be exchanged in an orderly, arm's-length transaction between knowledgeable and willing buyers and sellers in an active market.

Market value is a core concept in many financial discussions. It denotes the amount an asset would fetch in the market today, as opposed to its purchase price or replacement cost. Market value is often approximated by fair value in accounting and reporting for assets with observable market prices, particularly for liquid financial instruments. It can be contrasted with book value, which is based on historical cost, and with intrinsic or fundamental value, which attempts to estimate value based on long-run cash flows or underlying fundamentals.

Valuation practices differ by asset type. For liquid securities, market value is typically derived from current quotes or recent trades. For illiquid assets, practitioners may rely on comparable transactions, appraisals adjusted to market conditions, or models that incorporate market inputs. Derivatives are frequently marked to market, updating values as market prices change.

Limitations exist in market-valued assessments. Prices can be volatile and influenced by liquidity, liquidity risk, sentiment, and information asymmetry. In stressed or thin markets, market values may deviate from longer-term fundamentals or intrinsic value, potentially affecting investment decisions, risk management, and reporting.