Assessment

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DEFINITION

Occurs when an asset's value must be determined for the purpose of taxation. This term also doubles as the name of the actual tax being levied in many cases. Assessments are made annually on some property, such as homes and cars. Other assessments may be made only once.

INVESTOPEDIA EXPLAINS

Assessments can be made according to various criteria. For example, homes are valued according to their physical condition, as well as comparable values of surrounding residences. Property tax on cars is assessed according to book value.


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