In the world of business, two terms that often come up are “agreement value” and “market value”. These terms relate to the value of a company, property or asset, and understanding them is crucial for making informed decisions in the business world.

Agreement value refers to the price that is agreed upon by the buyer and the seller when a transaction takes place. This value is often negotiated and may not reflect the actual market value of the asset being sold. Agreement value is usually determined by factors such as the current market conditions, the asset`s resale value, and any other relevant factors that may impact the final price.

Market value, on the other hand, refers to the actual value of an asset as determined by the market. It takes into account the supply and demand for the asset, as well as any other relevant factors that may impact the asset`s value. Market value is often determined by factors such as the current market conditions, the asset`s condition and potential return on investment.

So, what`s the difference between agreement value and market value? In short, agreement value is the price that two parties agree upon when a transaction takes place, while market value is the actual value of the asset as determined by the market.

It`s important to note that the agreement value may be higher or lower than the market value. For example, if a seller is in a hurry to sell their property, they may agree to a lower price than the market value. On the other hand, if there are multiple interested buyers and a bidding war takes place, the agreement value may end up being higher than the market value.

When it comes to making business decisions, both agreement value and market value are important to consider. For example, if you`re looking to purchase a property, you`ll want to ensure that the agreement value is in line with the market value. If the agreement value is significantly higher than the market value, you may be overpaying for the property.

In conclusion, agreement value and market value are both important concepts to understand in the business world. While agreement value is the price that is agreed upon between two parties during a transaction, market value is the actual value of the asset as determined by the market. Understanding these concepts will enable you to make informed decisions when it comes to buying or selling assets in the business world.