Accredited Business Valuation (ABV) 2025 – 400 Free Practice Questions to Pass the Exam

The valuation premise "in use" is applied in contexts where the value of an asset is maximized through its operation in conjunction with other assets or as part of an ongoing business enterprise. This premise recognizes that the asset contributes to the overall profitability and functionality of the business beyond its standalone value.

When an asset is considered "in use," it pertains to scenarios where the asset generates economic benefits or synergies when linked to other assets within an operational context. For example, machinery in a manufacturing plant may have a higher value when analyzed within the full spectrum of production processes and operational capabilities, compared to its resale value if it were sold independently.

Other choices do not correctly reflect the concept of "in use." The notion of assets standing alone effectively pertains more to a separate valuation premise, "in exchange," which is concerned with the value of an asset considering its standalone capabilities. An appraisal situation generally encompasses different aspects of valuation that may not specifically tie to the "in use" premise. Lastly, partial ownership of an asset does not necessitate its valuation premise as "in use," which focuses on functional integration in a business setting rather than ownership status.