FORCED LIQUIDATION VALUE Definition

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FORCED LIQUIDATION VALUE is the value at which the asset or assets are sold as quickly as possible, such as at auction.

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FINANCIAL RATIO is the result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.

MONETARY UNIT ASSUMPTION assumes that values can be relevantly measured in current monetary units. It is not necessary that the currency be stable or that inflation effects be negligible. The discount rate (cost of capital) automatically takes into account expected inflationary effect on dollar or inventory values for the specific entity. This supports economic valuation and enhances comparability.

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