going-concern value

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Going-concern value

The value of a company to another company or individual in terms of an operating business. The difference between a company's going-concern value and its asset or liquidation value is deemed goodwill and plays a major role in mergers and acquisitions.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Going-Concern Value

The value of a company as long as it remains in business. One calculates the going-concern value by adding the value of its goodwill and income to its net asset value. This is an important calculation when determining the appropriate purchase price in a merger or acquisition. Mortgage lenders also use it to determine the value of an income-producing property.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

going-concern value

The value of a business in operation,taking into account the goodwill and the value of the income, in addition to hard assets, such as real estate and equipment. When appraising a project to develop income-producing property,the appraiser will usually provide two numbers—one for the project on the day of completion,with no tenants,and one when it reaches stabilized occupancy and is a going concern.Lenders who take mortgages on income-producing property with intensive management aspects—such as hospitality properties—usually obtain a going-concern rider for the title insurance so that coverage will be increased above the value of the real property.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Further, two of the basic purposes of Chapter 11 would not be furthered with the bankruptcy filing, that of preserving going concern values and maximizing property available to satisfy creditors.
The Court observed that the Debtor was out of business and therefore had no going concern value to preserve in Chapter 11 through reorganization or liquidation.
On October 23, 2002, the Appraisal Institute and the American Society of Appraisers sent a letter to the Small Business Administration addressing concerns the two groups had with the agency's Standard Operating Procedure 50-10 regarding going concern values and appraisal guideline inconsistencies.
An appraisal of this going concern value, which may include the business' value as well as personal property assets, should be differentiated from the value solely of the real property.