Environmental value, valuation methods, and natural disaster damage assessment

Includes bibliography

Relative accuracy and predictive ability of direct valuation methods, price to aggregate earnings method and a hybrid approach

In this paper, we assess the relative performance of the direct valuation method and industry multiplier models using 41 435 firm-quarter Value Line observations over an 11 year (1990–2000) period. Results from both pricingerror and return-prediction analyses indicate that direct valuation yields lower percentage pricing errors and greater return prediction ability than the forward price to aggregated forecasted earnings multiplier model. However, a simple hybrid combination of these two methods leads to more accurate intrinsic value estimates, compared to either method used in isolation. It would appear that fundamental analysis could benefit from using one approach as a check on the other.

Valuation of tourism's natural resources

Discusses the implications of the economic valuation of natural resources used for tourism and relates this valuation to the concept of total economic valuation. It demonstrates how applications of the concept of total economic valuation can be supportive of the conservation of natural resources used for tourism. Techniques for valuing tourism’s natural resources are then outlined and critically evaluated. Consideration is given to travel cost methods, contingent valuation methods, and hedonic pricing approaches before concentrating on current developments of valuation techniques, such as choice modelling. The general limitations of existing methods are considered and it is argued that more attention should be given to developing guidelines that will identify ‘optimally imperfect methods’. An overall assessment concludes this article.

Why aren't brand names regognized as intangible assets in the financial Statements? A study of the subjectivity of brand valuation

The goal of this paper is to determine and to quantify how subjective brand valuation is. To do so, we review the different valuation methods and apply the Hirose model to a sample of 20 US companies from the technology sector. Even if the results vary in function of the rankings we choose as a comparison, we may identify the trend that brands are usually overvalued in those rankings. It explains why internally generated goodwill (which includes brand names) is not recognized as an intangible asset in the financial statements.

A comparative study of difficulties in accounting preparation and judgement in agriculture using fair value and historical cost for biological assets valuation

Este estudio realiza un investigación empírica comparando las dificultades que se derivan de la utilización del valor razonable (VR) y del coste histórico (CH) en el sector agrícola. Se analiza también la fiabilidad de ambos métodos de valoración para la interpretación de la información y la toma de decisiones por parte de los agentes que actúan en el sector. Mediante un experimento realizado con estudiantes, agricultores y contables que operan en el sector agrícola, se halla que estos tienen más dificultades, cometen mayores errores e interpretan peor la información contable realizada a CH que la realizada a VR. Entrevistas en profundidad con agricultores y contables agrícolas desvelan prácticas contables defectuosas derivadas de la necesidad de aplicar el CH en el sector en España. Dadas las complejidades del cálculo del coste de los activos biológicos y el predominio de pequeñas explotaciones en el sector en los países occidentales avanzados, el estudio concluye que la contabilidad a VR constituye una mejoría de utilización y desarrollo de la contabilidad en el sector que la confeccionada a CH. Asimismo, el CH transmite una peor representación de la situación real de las explotaciones agrícolas.

Fair value versus historical cost-based valuation for biological assets: Predictability of financial information

There is an intense debate on the convenience of moving from historical cost (HC) toward the fair value (FV) principle. The debate and academic research is usually concerned with financial instruments, but the IAS 41 requirement of fair valuation for biological assets brings it into the agricultural domain. This paper performs an empirical study with a sample of Spanish farms valuing biological assets at HC and a sample applying FV, finding no significant differences between both valuation methods to assess future cash flows. However, most tests reveal more predictive power of future earnings under fair valuation of biological assets, which is not explained by differences in volatility of earnings and profitability. The study also evidences the existence of flawed HC accounting practices for biological assets in agriculture, which suggests scarce information content of this valuation method in the predominant small business units existing in the agricultural sector in advanced Western countries

A comparative study of difficulties in accounting preparation and judgement in agriculture using fair value and historical cost accounting for biological assets valuation

This paper presents empirical research comparing the accounting difficulties that arise from the use of two valuation methods for biological assets, fair value (FV) and historical cost (HC) accounting, in the agricultural sector. It also compares how reliable each valuation method is in the decision-making process of agents within the sector. By conducting an experiment with students, farmers, and accountants operating in the agricultural sector, we find that they have more difficulties, make larger miscalculations and make poorer judgements with HC accounting than with FV accounting. In-depth interviews uncover flawed accounting practices in the agricultural sector in Spain in order to meet HC accounting requirements. Given the complexities of cost calculation for biological assets and the predominance of small family business units in advanced Western countries, the study concludes that accounting can be more easily applied in the agricultural sector under FV than HC accounting, and that HC conveys a less accurate grasp of the real situation of a farm.

Improving the inventory management and valuation process, Case: The Switch Drive Systems

The goal of this study is to create a new inventory valuation process for The Switch Drive Systems and to improve its inventory management practices. In the matter of inventories the main problems in the case company are that it doesn’t have consistent valuation methods throughout the company and that information received in ERP system isn’t trustful. The research is qualitative case study. The empirical data is gathered through observing and unstructured interviews. The research shows that material flow process and the inventory valuation must be divided and handled separately but they should interact with each other. The result is a new inventory valuation process which takes many factors of material process under the consideration in order to receive reliable value for inventories.

Economic Valuation of Coastal Wetlands: A Study of Cochin Back waters in Kerala

The major objective of this chapter was to estimate the indirect benefits provided by the Cochin wetlands to direct, indirect and non-user populations.This chapter gives the details of the Contingent valuation survey that was executed in the study area. Section one described the actual survey and its execution. Section two undertook a detailed discussion of the methodological issues involved in the survey. Section three contained some discussion on the study.This analysis has demonstrated the feasibility of extending the use of contingent valuation methods to local populations in developing countries like India. Certain issues emerge from these applications. Income is strongly related to willingness to pay in these surveys, yet income levels are often low.Secondly, education is not a factor that influences willingness to pay in the coastal belt very much. Rather, relation of individual occupation to any wetland based activity very much influenced their willingness to pay. The study revealed that people very much valued the indirect function performed by wetlands, in fact as much as they valued the direct benefits provided by the system. There still exist differences of opinions among experts when undertaking such valuation studies. However, in the absence of a better technique for valuing environmental services that have no markets, this is definitely a first step

Analysis of the LIFO inventory valuation method during the onset of IFRS

I propose that the Last in, First out (LIFO) inventory valuation method needs to be reevaluated. I will evaluate the impact of the LIFO method on earnings of publically traded companies with a LIFO reserve over the past 10 years. I will begin my proposal with the history of how the LIFO method became an acceptable valuation method and discuss the significance of LIFO within the accounting profession Next I will provide a description of LIFO, the First in, First out (FIFO), and the weighted average inventory valuation methods and explore the differences among each. More specifically, I will explore the arguments for and against the use of the LIFO method and the potential shift towards financial standards that do not allow LIFO (a standard adopted and influenced by the International Financial Accounting Standards Board). Data will be collected from Compustat for publicly traded companies (with a LIFO Reserve) for the past 10 years. I will document which firms use LIFO, analyze trends relating to LIFO usage and LIFO reserves (the difference in the cost of inventory between using LIFO and FIFO), and evaluate the effect on earnings. The purpose of this research is to evaluate the accuracy of LIFO in portraying earnings and to see how much tax has gone uncollected over the years because of the use of LIFO. Moreover, I will provide an opinion as to whether U.S. GAAP should adopt a standard similar to IFRS and ban the LIFO method.

Linking policies for biodiversity conservation with advances in behavioural economics

Global biodiversity loss and its consequences for human welfare and sustainable development have become major concerns. Economists have, therefore, given increasing attention to the policy issues involved in the management of genetic resources. To do so, they often apply empirical methods developed in behavioral and experimental economics to estimate economic values placed on genetic resources. This trend away from almost exclusive dependence on axiomatic methods is welcomed. However, major valuation methods used in behavioral economics raise new scientific challenges. Possibly the most important of these include deficiencies in the knowledge of the public (and researchers) about genetic resources, implications for the formation of values of supplying information to focal individuals, and limits to rationality. These issues are explored for stated-preference techniques of valuation (e.g., contingent valuation) as well as revealed preference techniques, especially the travel cost method. They are illustrated by Australian and Asian examples. Taking into account behavioral and psychological models and empirical evidence, particular attention is given to how elicitation of preferences, and supply of information to individuals, influences their preferences about biodiversity. Policy consequences are outlined.

Grau de cumprimento com as recomendações do Basel Committee on Banking Supervision e da Organisation of Securities Commissions, sobre divulgação de informação relacionada com instrumentos derivados - evidência empírica no sector bancário português

This study analyzes the level of disclosure on derivatives, in accordance with the recommendations issued by the Basel Committee on Banking Supervision and the Organization of Securities Commission, by Portuguese banks. We have analyzed individual annual reports related to 2009, using a disclosure index based on those recommendations. We concluded that the number of companies that provides information about derivative instruments is quite high, but the average value of disclosure is very low. The information disclosed more frequently is that related to general aspects, followed by information related to accounting and valuation methods.

Reabilitação de um imóvel industrial em Marvila: projeto de investimento

Trabalho de Projeto para obtenção do grau de Mestre em Engenharia Civil