In
finance,
valuation is the process of estimating what something is worth. Items that are usually valued are a financial
asset or
liability. Valuations can be done on assets (for example, investments in marketable securities such as
stocks,
options,
business enterprises, or
intangible assets such as
patents and
trademarks) or on liabilities (e.g.,
bonds issued by a company). Valuations are needed for many reasons such as
investment analysis,
capital budgeting,
merger and
acquisition transactions,
financial reporting, taxable events to determine the proper
tax liability, and in
litigation.