What does "value in use" refer to?

"Value in use" refers to the specific value that a property holds when it is utilized for a particular purpose. This concept emphasizes the importance of a property's functionality and its contribution to the economic or operational objectives of the user. In contrast to other valuation methods that might focus solely on market conditions or potential investment returns, "value in use" is rooted in the actual benefit that the property provides to the individual or organization using it.

For example, a building may have a much higher value in use if it is specifically designed and equipped for a manufacturing operation compared to its resale value on the market. This valuation focuses on the utility and advantages that the property offers in its current application.

Other choices do not accurately capture the essence of "value in use." Resale value emphasizes what the property could fetch on the open market, highest auction value looks at the potential maximum bids at an auction rather than actual use, and portfolio value considers how a property contributes to a broader investment strategy rather than its specific utility in a given situation.