Embedded value

Abstract: This paper investigates whether audit quality can increase the value relevance of fair value accounting.It is found that:(1) fair value accounting information has incremental value relevance;(2) Big 4 auditing firms can improve the value relevance of fair value accounting information.The result provides policy implications on how to improve the value relevance of fair value accounting in emerging markets.

Abstract: The puporse of this research is to analyze the impacts of derivatives to firm value. The sample of this research consists of 20 domestic life insurance companies and the duration of the research is the year between 2002 and 2009. And multi-regression analysis by cross-sectional analysis approach is used for the entire sample in this study. The result of the research indicates the impact of derivatives use on the value of the firm, which was the original focus of this study, is insignificant. And firm value increases as the leverage, rate of return on a loan, the ratio of product for annuity and the ratio of expense decrease.

Abstract: Value and value uncertainty are increasingly recognized as the approp riate metrics for system design and acquisition. Value, unlike cost or performance, is not an endogenous characteristic of a system but an information -intensive metric characterizing a system in relation to its environment, its stakeholder, and its technic al attributes. I n uncertain environments, decision making at the system -level should be value -based, or at a minimum value -informed. This value centric mindset is an emerging paradigm for system design and acquisition, and it follows the performance -centri c mindset of the Apollo era, and the cost -centric or cost -effectiveness mindset. Several challenges remain to be addressed for a convincing and broad adoption of a value centric approach to system design and acquisition. One challenge in particular is rela ted to the multi -scale nature of the concept of value, a nd the linkage between value at the engineering system level and value at the corporate level (or the organization that is acquiring the system for example). For companies, at the senior management le vel, the corporate imperative dictates the focus on and creation of value for shareholders. At the engineering level, program managers strive to create best lifecycle value systems. The challenge is to understand value at the system level in the context of value at the corporate level, and link the former to the latter. In this paper, we focus on value at the corporate level and bring some of its different aspects to an engineering audience. In particular, we discuss and analyze the book value and market v alue of several aerospace and defense companies. We introduce for these companies Value Maps and Hybrid Value Trajectories, which display and track their value(s) and value dynamics between 2004 and 2008. We develop a corporate value scorecard, which inclu des in addition to the value trajectory, accounting and financial indicators for these companies collected from their 10 -K filings with the Securities and Exchange Commission (SEC) and other financial information sources. Interpreting the information in t hese scorecards sets the foundation for establishing a quantitative connection between value at the corporate level and value at the system level. This work complements a companion paper that focuses on value at the system level and is entitled, “Beyond Cos t and Performance, a Value -Centric Framework and Pareto Optimization for Communication Satellites.”