Market value calculation

The market value calculation is a sub-area of accounting and a method of calculating co-products.

Definition / explanation

This method is used in joint production processes in which several main products are created. This involves an equivalence number calculation in which the market prices of the products are used as equivalence numbers.

The opposite of the market value calculation is the residual value calculation, which is used when a clear main product and one or more by-products arise in joint production processes.

Allocation of costs in the market value calculation

In the cost allocation within the market value calculation, the causation principle and the sustainability principle are used:

Causation principle

The causation principle is the most important principle in cost and performance accounting. In general, it says that the costing object (cost center, product, operating area) can only be charged with those costs that it actually caused.

A distinction is made, on the one hand, in the causality principle, which describes a cause-effect relationship, according to which the costs arise from production. The finality principle on the other hand sees an end-means relationship in the foreground: costs arise with production.

However, the causation principle cannot be used when calculating co-products, because several products are always created in the same production process. It is not possible to determine the exact costs of the individual products.

Load capacity principle

In this case, there is the sustainability principle on which the market value calculation is based. The Overhead according to the resilience of the Payers distributed. Each co-product is assigned as many costs as it can bear.

The resilience is measured on the basis of the following criteria: sales, price and contribution margin. The fixed costs are distributed according to the amount of the respective gross profits or contribution margins.

In general, the higher the contribution margin, the greater the resilience with fixed costs. But this also shows that the application is very problematic.

Criticism of the market value calculation

The equivalence numbers for market prices are chosen arbitrarily and the application of the sustainability principle is not optimal due to the reference to the contribution margin.


  • Market value calculation: for several or ambiguous main products
  • Residual value calculation: for a main product and several by-products
  • Causal principle: not applicable to market value calculation, distinction between causality and finality principle
  • Tragfähigkeitsprinzip: anhand der Belastbarkeit werden Overhead und fixe Kosten verteilt
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