Value in Use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use. In the U.S., Value-in-Use is generally estimated at a use which is less than highest-and-best use, and therefore value-in-use is generally lower than
When a particular user enjoys special benefits, such as extraordinary financing, agglomeration benefits, or grandfathered zoning, then the value may be higher than
market value, and the value is considered to be an investment value.
International Valuation Standards
The current edition of International Valuation Standards (IVS 2007) re-states the
IFRSdefinition of Value-in-Use, which would allow for either a higher value than market value or a lower value than market value:
:"Value in Use" The present value of the future cash flows expected to be derived from an asset or a cash-generating unit [PDF| [http://www.ivsc.org/pubs/exp_drafts/ivs2.pdf Exposure Draft of Proposed Revised International Valuation Standard 2 - Bases Other than Market Value, June, 2006] |204 KiB ] .
As defined in IVS2, Investment Value is the valuation equivalent of the accountancy concept of
Value-in-use. Whereas IFRSs define the accountancy concepts of Fair Value and Value-in-Use in operational terms, IVSs define Market Value and Investment Value by way of generalised definitions.
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