What is the process of estimating what an item is worth called?

The process of estimating what an item is worth is known as valuation. Valuation involves determining the monetary value of an asset, which can include various methods and approaches depending on the type of item being assessed and the context in which the valuation is being performed. This term is widely used across different fields, including real estate, business, and financial assets.

Valuation is essential in many scenarios, such as during insurance claims, estate planning, or when establishing a selling price for an item. This process often relies on market analysis, comparables, and sometimes specific valuation models tailored to various asset classes.

In contrast to the other terms: depreciation refers to the reduction in the value of an asset over time, often due to wear and tear. Appraisal typically refers to the professional assessment of value, usually carried out by an expert, while assessment usually refers to the process of determining the value of property for tax purposes. Valuation encompasses these concepts but is broader, addressing the overall estimation of worth across different contexts.