Asset value derives from future earnings rather than intrinsic commodity value

Evidence

Generally, an asset is valued in terms of the expected benefits a business will derive from it in the future (i.e., future earnings), worked out through specific valuation practices such as DCF analyses (Doganova 2011), or other methods (Bratic, Blok, and Gostola 2014). In this way, value is constituted by valuation practices focused on an organizational entity (i.e., firm) and not on the value latent or inherent in a commodity. — Kean Birch, Rethinking Value in the Bio-economy, 73

Categorization

  • DEFINE: Clarifies the core assetization shift: value is constituted by valuation practices on a firm, not latent in a commodity.
  • XREF: connects to: One’s debt is always another’s asset and income stream — Mark Blyth, Austerity: The History of a Dangerous…, 44; An asset is property yielding an income stream, unlike a commodity for sale. — Kean Birch, Rethinking Value in the Bio-economy:…, 40; Analyzing bio-economy value requires focusing on assets rather than commodities — Kean Birch, Rethinking Value in the Bio-economy:…, 68 (+7 more)

Broader Connections