What is actual value?
The current value is the present value of an asset, such as a securities portfolio, calculated based on the most recent exchange rates or market prices. This gives an accurate picture of what the asset is worth at this moment, as opposed to historical value or acquisition value, which are based on previous prices.
The current value is of crucial importance for investors and companies to gain a realistic insight into the true value of their assets, especially when decisions need to be made about sale, investment, or revaluation. However, it is not the same as present value, which reflects the future value of cash flows against a certain return or interest rate.
Comparable terms:
- Market value: The price that a good or asset would yield on the free market.
- Daily value: The value of a good on a specific day, often used in the insurance industry.
- Fair value: The price for which an asset would be traded between market parties under normal circumstances.
The term current value is essential in various financial contexts, including the valuation of assets, the preparation of balance sheets, and the making of investment decisions, where it is important to take into account the context and the specific market conditions.