Deciphering the Valuation Spectrum
Estimated Fair Market Value (FMV)
Picture an ideal transaction where CEA equipment is sold under typical market conditions – no undue pressure, with both parties well-informed and consenting. This ideal is encapsulated in Fair Market Value. It represents the expected worth of CEA assets in a balanced market, where the sale timeframe is reasonable.
Estimated Forced Liquidation Value (FLV)
Conversely, envision a scenario necessitating swift asset disposal, often under a tight schedule and on an “as-is, where-is” basis. This situation describes the Forced Liquidation Value, which, owing to the immediacy and conditions of sale, tends to fall below FMV.
Estimated Orderly Liquidation Value (OLV)
Bridging FMV and FLV is the Orderly Liquidation Value. OLV is realized when assets must be sold promptly yet within a structured and considered manner, allowing for somewhat higher returns than FLV but not reaching FMV levels.