Is the process of estimating the market value of assets or liabilities.
Some assets are difficult to value e.g. goodwill (value of businesses reputation). They may be overvalued on the balance sheet or not included at all
This isn’t as simple as writing down how much an asset was purchased for. The value of most assets changes over time due to inflation. This means assets have to be revealed to account for the appreciation or depreciation
The value of assets might not be exactly limiting the accuracy of the financial reports
