Market method: Market method is the general name of various evaluation techniques and methods that use the recent transaction prices of the same or similar assets in the market to estimate the value of assets through direct comparison or analogy analysis.

Income method: Income method is the general name of various evaluation methods to judge the value of assets by estimating the present value of the expected future income of the assets being evaluated.

Cost method: Cost method refers to various evaluation methods that estimate the replacement cost of the appraised assets first, then estimate the derogatory factors of the appraised assets, and deduct the value of the appraised assets from the replacement cost.

The comparative analysis of the three evaluation methods is as follows:

Market method is the simplest and most effective method in asset evaluation, which can objectively reflect the current market situation of assets. Its evaluation parameters and indicators are directly taken from the market, and the evaluation value can better reflect the actual market price, and the evaluation results are easy to be understood and accepted by all parties. However, market law needs to be based on an open and active market, and sometimes it is difficult to apply because of the lack of comparable data. This method is not suitable for the evaluation of special machinery and equipment, most intangible assets and some assets strictly restricted by geography and environment.

Income method can truly and accurately reflect the capitalization value of enterprises, and it is easy to be accepted by buyers and sellers when combined with investment decision. However, the expected return is difficult to predict, which is influenced by strong subjective judgment and unpredictable factors in the future. This method has a small scope of application in the evaluation, and is generally suitable for the evaluation of the overall assets of enterprises and individual assets with predictable future income.

The cost method fully considers the loss of assets, and the evaluation results tend to be more fair and reasonable, which is beneficial to the evaluation of single assets and special-purpose assets and to the preservation of enterprise assets. It can be widely used under the condition that it is difficult to calculate the future income of assets or obtain market reference. However, the cost method is a heavy workload method, and this method is based on historical data to determine the present value, so we must fully analyze the feasibility of this assumption. In addition, it is not easy to calculate economic depreciation comprehensively and accurately.

note:

Asset appraisal is a professional activity to evaluate and estimate the present value of assets. Asset appraisal method is a technical means to evaluate and estimate the value of assets. It is a set of method system based on the technical methods of engineering technology, statistics, accounting and other disciplines, combined with its own characteristics. The system consists of many specific methods of asset evaluation, which can be divided into three basic types according to different analysis principles and technical routes, or three basic methods, namely, market method, cost method and income method.