The value of an asset or liability in an arms length transaction between unrelated willing and knowledgeable parties. A concept used in many accounting standards including the IFRSs.
This is an estimate of the economic worth of a life insurance business. In essence, it is the present value of distributable earnings which is made up of two components.
The valuation of a company by separately valuing different parts of it so different valuation methods or ratios can be applied to disparate businesses.
