going-concern value


Also found in: Legal.

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.

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.

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.

References in periodicals archive ?
It is unclear when HUD began its policy of allocating a portion of the net operating income and of the going-concern value to proprietary earnings, but James K.
If we assume that assets can be sold for their estimated going-concern value, a typical firm's return matches the return to a benchmark portfolio.
TEI submits that there is no statutory basis for denying like-kind treatment for goodwill or going-concern value.
1 of The Appraisal of Real Estate, 13th edition (Appraisal Institute, 2008, page 30), where the going-concern value of a business enterprise is divided between tangible property (composed of personal property and real property) and intangible property of various types.
1031(a)-2(c)(2), a business's goodwill and going-concern value are not like-kind to the goodwill and the going-concern value of another business.
In fact, even the going-concern value of an agency (tangible assets plus intangible assets, such as goodwill) may have little bearing on the actual purchase price of an agency.
the remaining cases, going-concern value was small or nonexistent.
We define our estimates as the difference between the going-concern value and the liquidation value of the firm's assets.
Although Golf Trust has not yet acquired ownership of the Innisbrook Resort, as previously disclosed, Golf Trust has based its calculation of the mortgage's liquidation value on an estimate of the future going-concern value of the Resort's operations on the assumption that Golf Trust will take possession of the Resort (subject to an amended management contract with Westin) and hold the property until operating revenues realize a modest recovery.
Immediately before the effective date of the election, the fair market value (FMV) of FS's assets, including intangible assets such as goodwill and going-concern value, was less than the sum of its liabilities.
The going-concern value of any hospitality property is as much influenced by competitive position in terms of its business as it is by real estate parameters.