The cash or cash-equivalent proceeds that can be realized by hurriedly liquidating an investment, like an asset or a host of assets (project), because the selling investor has no sufficient time to sell on the open market, or in ordinary market conditions. This process typically involves selling at prices lower than fair value (market value).
According to the extent of urgency, liquidation generally takes place in two ways: forced liquidation and orderly liquidation. Selling illiquid assets, like real estate, at fair value is not often possible within a few days or weeks; whilst it is much easier to sell marketable securities at more favorable terms (at once or within numbered days), thanks to their high liquidity. In general, the seller has to sacrifice some portion of the price, if forced to liquidate in a quickly manner, i.e., in a shorter than usual period of time.
The liquidation value is also known as an abandonment value.
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