Biotech Values

[medchal]

Off-topic: "...I can see how this might be confusing!" My point was that is is misleading, not simply confusing, as no market value for a non-marketable asset is "fair". When applied to an asset which at least arguably has a "market value", it probably doesn't make as much difference, but it still makes some.

Actually, the real estate values you mention are arrived at, as are most values, using a multi-pronged "best use" sort of approach. The usual example given to justify this approach is the race horse analogy: A thoroughbred race horse probably has some kind of market value; another value can be determined by the likely purses it can win; a third by its value as a stud; and a fourth by its value if sold to the local dog food processor. One obviously would try to arrive at value using the highest of the four valuations.

Probably the worst use of a bank's functioning, unimpaired commercial loan would be to sell it (at dog food prices), and the best and highest use is to let it mature and collect it, which would imply a value very close to par (adjusted only for interest-rate considerations and whatever small credit risk is involved). In my opinion, this is anathema to the accounting profession because, simply put, it is too simple and too accurate, and would not provide employment (and business power) to the accounting profession. Others may take a different view if they wish, and I'll get off this topic now, since it is at best tangentially related to investing.