valutation

Valutation is the act or process of evaluating the value or worth of an asset, property, or other item. It is a term encountered in certain lexicons as synonymous with valuation or evaluation, but it is relatively uncommon in modern everyday English and may appear more often in historical, legal, or cross-linguistic contexts.

In practice, valutation is most often discussed in finance, real estate, insurance, and related fields where a formal assessment determines market value, fair value, or replacement cost. Although the term can be used interchangeably with valuation, many standards, guides, and professional bodies prefer the terms valuation or appraisal.

Valuation approaches commonly fall into three categories: market-based, income-based, and cost-based. The market approach estimates value by comparing the asset to recently sold similar items. The income approach bases value on expected future cash flows, discounted or capitalized to present value. The cost approach estimates value as the cost to replace or reproduce the asset, adjusted for depreciation or obsolescence.

The valutation process typically includes clarifying the purpose, identifying the asset, gathering relevant data, selecting an appropriate method, performing calculations, applying necessary adjustments, and documenting the rationale in a report. The quality of a valuation depends on transparent assumptions, data quality, and a clearly defined scope.

Standards and practices for valutation vary by jurisdiction and context, with frameworks such as IFRS for fair value, the International Valuation Standards (IVS), and professional appraisal guidelines guiding procedures and disclosures. Limitations include market volatility, data gaps, and subjective judgments.

See also valuation, appraisal, estimation, assessment.