What does valuation mean?
Valuation is the assessment of what something is worth, most often expressed as an estimated monetary value. The term is especially common in business, finance, insurance, property, taxation, and law, where people may commission or examine a formal valuation of a building, company, investment, or other asset. A valuation may also refer to the process of making that assessment rather than to the resulting figure. The word generally carries a formal, professional tone and suggests that the amount assigned is based on evidence, expertise, or an agreed method, although it remains an estimate rather than an absolute fact. In broader contexts, valuation can mean an assessment of significance, merit, or usefulness. Understanding the distinction is useful because a valuation is not necessarily the same as a sale price: it represents an informed judgment about value, which may be higher or lower than the amount ultimately agreed or paid.
nounAn estimate of the monetary worth or value assigned to something, such as property, a business, or an asset; also the process of making such an assessment.
- An estimate or determination of the monetary value of a property, business, asset, or other thing.
- The process or act of assessing the worth or value of something.
"The property received a valuation considerably higher than its previous sale price."
"Investors revised their valuation of the company after reviewing its latest financial results."
"The auction house's valuation of the painting attracted considerable public interest."
The plural is used when referring to separate assessments of value or to several estimated amounts.
"The two departments prepared independent valuations of the property."
A valuation puts a number on worth—but the number is an estimate, not a verdict.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does valuation come from?
The English word dates from the early 17th century and comes from Latin valuationem, a noun derived from valutare, meaning to appraise or determine the worth. This in turn is connected with Latin valere, meaning to be strong or to be worth. The same root underlies words such as evaluate, valid, equivalent, and valour, reflecting its long association with strength and worth.
Related word forms
How valuation is actually used
Formal and especially common in finance, insurance, property, taxation, and law. It usually implies a monetary estimate, though it can more broadly refer to judging the worth or significance of something.
Easily confused with valuation
A valuation usually estimates monetary worth, whereas an evaluation assesses quality, effectiveness, or performance more generally.