Assessment Approaches: Market Approach

According to the International Assessment Standards, in order to obtain a certain type of value, the three approaches of the unanimously acknowledged and applied value may be used, that are substantiated on the economic principles of substitution, variable proportions or benefits anticipation: the cost, market and income approach. This article presents aspects of the market approach (based on comparison), which is used when the value of a company can be determined by comparisons with the known values of other companies that have been the subject of sale and purchase transactions. The comparative analysis is based on the similarities and differences between the considered companies and the frequency of transactions, which influences the value.