Commercial value

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Commercial value
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Commercial value is the expected value of an object that may be the subject of a commercial transaction. It may result, among other things, from average prices charged by unrelated parties on the market or from valuation by a specialist in the field of sales of specific goods. However, the basic principle is that commercial value is an objective amount shaped by factors which are independent of each other. It is expressed in terms of the value the buyer actually paid for the good or service in question. This is the final confirmation of its value. In opposition to a given slogan, there is no commercial value associated with the free production or transfer of goods, which under normal market conditions would express a certain value in the form of money or equivalent benefit, the so-called barter.

Estimating commercial value

Establishing commercial value is a complex process. It consists of several stages such as:

  • determination of the type of object to be valued
  • the adoption of an appropriate valuation method
  • aggregation of market data not distorted by links between actors;
  • drawing up an appropriate market analysis.

In view of the above, the person undertaking the valuation of the company should be able to determine their type. This means that the species of things to be evaluated must be identified. Then, while valuing this object, the person performing this activity should orient himself/herself on the most adequate methods used in valuing this type of goods. After selecting and justifying the choice of a given method, it is important to carry out appropriate research. It is during this process that all the necessary data are collected, which enables the creation of an appropriate research sample. Then, the given research sample will be analysed, inter alia, with the use of statistical values. Once the relevant data have been received, a report should be drawn up which will present all possible requests for the subject in question [1]. However, the above process may be undermined. This is because each analysis is based on data that are more or less subjective and not resistant to extreme values. Therefore, it is important to collect as much data as possible on a case-by-case basis from sources that are considered universally reliable.

Importance of commercial value in virtue of tax law

Commercial value is very important from the perspective of tax law. This is due to the fact that setting the value of an object at a non-market level may have negative legal implications. This is due to the fact that the tax authority when carrying out its own analysis, may conclude that the taxpayer has deliberately overestimated or overestimated its tax base. This is particularly common in the case of transactions between related parties [2]. In order to protect themselves against such negative implications, companies are obliged to prepare transfer pricing documentation. They use, inter alia, statistical data, in particular the values of the interquartile ranges. Also in these cases, it is important to determine the relevant value, which can then be related to the true values used by unrelated parties. In view of the above, commercial value determination is a valuable market tool that allows not only tax authorities to counteract tax evasion, but also provides taxpayers with the possibility to verify controlled transactions concluded with related parties [3].


  1. Cristea A. D., Nguyen D. X., 2013, p. 3-6
  2. Cristea A. D., Nguyen D. X., 2013, p. 3-6
  3. Matei G., Pirvu D., 2011, p. 99-110


Author: Karolina Kopecińska