The fair value of equipment based on its commodity worth is defined as?

The fair value of equipment based on its commodity worth is best defined as scrap value. Scrap value represents the estimated residual value that can be gained from selling the equipment for parts or materials once it is no longer useful for its intended purpose. It reflects the worth in terms of raw materials or market demand for those materials, which is aligned with commodity valuation.

In contrast, book value refers to the recorded value of an asset in the accounting books, usually based on historical cost minus depreciation. Orderly liquidation value is the anticipated amount that would be received if the equipment were sold in a structured manner, often involving a higher valuation than scrap value because it assumes a more organized selling process. Salvage value is similar to scrap value but may imply a slightly different context, often used to describe what can be recovered at the end of an asset's useful life, which may include recovery through sales rather than merely as scrap.