Topic
Embedded value
About: Embedded value is a research topic. Over the lifetime, 343 publications have been published within this topic receiving 8853 citations.
Papers published on a yearly basis
Papers
1 Jan 1984
TL;DR: In this article, the authors provide an overview on value and income measurement in financial accounting, focusing on four different methods that may be applied to asset valuation: historic cost, replacement cost, net realizable value and net present value.
Abstract: Publisher Summary
This chapter provides an overview on value and income measurement. Value relates to the benefit to be derived from having control over an asset or resource—to be able to use, sell, or store it as wished. In essence, there are four different methods that may be applied to asset valuation: (1) historic cost, (2) replacement cost, (3) net realizable value, and (4) net present value. The concepts of income and value are closely related, for valuation is concerned with the measurement of the stocks of wealth and income measurement with the flow of benefit from the use of that wealth. Accounting concepts of income and value have been mainly dominated by two postulates—the cost postulate and the realization postulate. The basis of valuation in financial accounting is historic cost or a derivative thereof that distorts seriously the measurement of income when the value of money is changing. The realization postulate that requires both objective evidence and reasonable certainty of asset value means that gains in asset values go unrecorded until they are actually sold.
30 Aug 2011
TL;DR: In this article, the authors consider the impact of non-economic factors on share prices, including the fair value of net assets, residual income, and self-created goodwill.
Abstract: The enterprise market value includes the fair value of net assets, the fair value of residual income, and the impact of Non-Economic Factors on share prices. In addition to the fair value of net assets, the measurement of enterprise excess profitability (Self-created Goodwill) could revise the differences between the fair value of financial statements' items and the stock value, and help the fair value to regain the value relevance. The Non-Economic Factors should be considered not only during the value relevance test, but also when to explain the results.
1 Jan 2016
TL;DR: In this paper, the authors proposed a method to calculate the life insurance provisions at the current value of the company's net liabilities to the policyholders, including a provision for future bonus distribution.
Abstract: Traditional life insurance accounting standards rely on various types of book and cost values, the result being that the income and balance sheet statements do not neccessarily give a true and transparent picture of the result of the life business. As examples, assets are typically stated as a mix of cost, current and amortised cost values, whereas life insurance provisions are calculated according to the approved technical basis. In this paper, it is suggested that this deficiency can be corrected by preparing life insurance accounts at current value. The proposed method implies that the life insurance provisions shall amount to the present value of the company's net liabilities to the policyholders including a provision for future bonus distribution. Moreover, any unrealised investment reserves are thrown into light, and it is shown how a bonus equalisation provision at current value may serve as a key indicator of the financial strength of the company. The method has been designed primarily for the Danish market, but aspects of the method should be of relevance more widely. Finally, the results are illustrated by a number of numerical examples.
TL;DR: In this article, the determinants and methodology of value management of a company are verified using a geometric model, which uses the appropriate quantitative values with respect to the real value of the company and the objective price of its shares in the open developed financial market.
Abstract: We have devoted the paper to verify the determinants and methodology of value management of a company. We proposed to determine the just value according to the geometric model, which uses the appropriate quantitative values with respect to the real value of a company and the objective price of its shares in the open developed financial market. Furthermore, the paper offers theoretical suggestions and practical recommendations which are useful for the investors and managers in making timely financial decisions
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2021 | 3 |
| 2020 | 2 |
| 2019 | 2 |
| 2018 | 3 |
| 2017 | 14 |
| 2016 | 20 |