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Market value
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A term (often used in published accounts) for the amount that an asset would realize if sold in a completely free market. Distinction should always be made between value in present use and value in alternative use. The latter may be very much greater, for instance where factory land could profitably be developed for housing. The Companies Act 1967 states that where the market value of land held by a company is substantially higher than its book value, the directors should draw attention to this fact. However, the Act does not say whether ‘market value’ means value in present or alternative use and so allows directors to equivocate.
Reference: The Penguin Business Dictionary , 3rd edt.
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