What is the value of the liquidation?
The liquidation value is an estimated value that would be accepted by the disposal of a piece of property. People can apply liquidation values to real estate, companies and other types of assets. In general, the value of the liquidation is below the real market value. Experienced accountants can estimate the liquidation value and provide additional value estimates. In this case, it assumes that the seller must quickly dispose of and cannot afford to wait for a fair market price. This is usually the worst value for real estate, and most sellers try to avoid being forced to be forced to sell for desperate liquidation value. In this case, the seller will not have to be liquidated, but it can be done over time, not immediately. This price is usually better because it assumes that some strategy can be used during the sale. However, thanks to the pressure exerted by the dealer, it is still under the real market value.
In the case of the company, if the liquidation value exceeds the price of the shares, it is an indicator that the company should be liquidated, while the proceeds are distributed to shareholders. Companies may be forced to do so because their first duty is their shareholders. Rarely, the deviation in the prices is caused by incorrect values and the company always verifies the value before taking the liquidation step for this reason. Companies can also administer protection against bankruptcy in order to have the opportunity to turn the company's value from closing and liquidation.
estimating the value of the liquidation can be challanging, especially with unique assets. Some assets are of nature are not visible and can therefore be significantly degraded if they need to be liquidated because there is not enough time to negotiate better prices. Other assets are so unusual that it is difficult to determine how much they would sell in the case of liquidation. A team of accountants can be involved in the valuation process to ensure the most accurate and fairer estimate.This is particularly important in the case of a publicly traded company where bad awards could hurt shareholders.