Ask an Instructor: The Difference Between Actual Cash Value and Marketable Cash Value
Thursday, August 20, 2020 in Ask an Instructor
ISA members are invited to send in their questions on all things appraising and education to ISA's instructors. One of ISA's instructors will share answers on the ISA Blog. Please send questions to firstname.lastname@example.org.
Question: What is the difference between Actual Cash Value and Marketable Cash Value?
Actual Cash Value is an insurance term usually defined as replacement cost less depreciation (depending on your jurisdiction). Depreciation, in this instance, typically refers to an incremental reduction in value based on age/life formulas commonly in use within the insurance industry. Actual cash value is usually established by the adjuster based on these depreciation standards and guidelines. Marketable cash value is the net proceeds from a sale. Mathematically, it is the gross proceeds less the expenses associated with the sale.