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The purpose of this paper is to survey the accounting concepts of valuation and the direction of accounting research in terms of development of valuation models. It also simulates some of the models. Moreover, the Dividend Discount Model, a financial model, is the foundation of a number of accounting based models and is discussed.

The objectives are achieved by surveying the literature for accounting models and empirical evidence for the model. The methodology also incorporates simulating the models under different conditions to find out the valuation predicted.

It was found out that the accounting models predict that accrual principles play a role in increasing the discrepancy between the book value and the market value of equity. Some of the recent valuation models, like the Feltham–Ohlson linear information model, incorporate accrual principles like conservatism. Though the empirical evidences are mixed for these models, it provides a theoretical framework to incorporate accrual principles in the accounting valuation models.

This paper provides practitioners with a snapshot of different models and their limitations.

This paper provides a comprehensive picture of the state of accounting valuation models and provides input for further development of these models.

This paper empirically examines whether dividends are value‐relevant in Japan by employing Ohlson’s (1995) accounting‐based equity valuation technique. The substantial U.S.‐based literature on dividends has confirmed the signalling role of dividends in mitigating information asymmetry between managers and investors, and is consistent with an environment characterized by dispersion of ownership. However, the most important corporate governance characteristic that distinguishes Japan from the U.S. is the predominance of inter‐corporate, interlocking ownership in Japan, which reduces information asymmetry and is therefore likely to diminish the role of dividends in mitigating such asymmetries. Pooled regression results provide evidence consistent with this hypothesis. However, even in such an environment, dividends are value relevant for firms that incur losses whilst paying dividends, and also for firms with permanent earnings.

This paper aims to offer a critical pathway to understanding recent changes and improvements in organizing and managing healthcare – such as the emerging “patient‐centred care” (PCC) approach.

The research is based on fieldwork performed as a mobile ethnography of translations of everyday healthcare work at a Swedish healthcare institution in which an analysis of the significance of contemporary accounting practices for disciplining action and thought was carried out.

Accounting is increasingly interlinked with medical practices today, with more and more people involved in translating action and thought into accounting‐based terms and values at all levels of their work lives; as this happens, accounting “produces” a way of thinking and valuing that even modifies professional identities. The discipline of medical knowledge is played out differently as accounting‐based valuation measures become internalised into the performance of medical professionals and as additionally their images of themselves and their patients change. Patient‐centred care is thereby seen not as a means of generating a pure or positive value for patients, expressed in the form of greater efficiencies and nation‐wide performance indicators. The loosely coupled forms of patient‐centred care are about how nurses, having translated accounting practices into their work and selves, use them as a means of managing the constraints and “cracks” in the PCC approaches.

Accounting allows the dynamics of the PCC approach to be understood and acted on in new ways. Accounting as a discipline involves both accounting professionals and medical professionals who circulate accounting numbers and values. Accounting, thus, is an activity that takes place inside and outside the self.

The purpose of this paper is to provide evidence that the quality of earnings of family run firms is superior to that of the other firms and that firms run by founding family members exhibit this trait even more prominently. Using insights from the fundamental accounting valuation model, this study also hypothesizes that financial markets place a higher weightage on earnings than book value for founding family-run firms in Thailand as these firms report a more reliable earnings number.

This is an empirical archival research.

The authors report evidence that financial markets place a higher weightage on earnings than book value for founding family-run firms. The evidence is consistent with the insight that current earnings of the founding family-run firms offer more information about future earnings and cash flow compared to book value than those for family (FAM) and non-family (NonCS) firms. The authors also provide evidence that earnings persistence and the accrual quality of the founding family firms are higher compared to the other firms. This evidence is contrary to the notion that family firms have more opaque disclosures, lower earnings quality and higher implied cost of equity capital.

The authors find support for the alignment hypothesis of the long-term family ownership of Thai firms. The authors consider these evidences consistent with the shareholder interest alignment hypothesis of the controlling shareholders as opposed to the entrenchment hypothesis.

The study implies that earnings of the Thai firms run by founding family members are more reliable and can be relied on more for firm valuation. Additionally, the authors also offer a different methodology by appealing to the valuation properties of the reported accounting numbers besides looking at the quality of accruals and earnings persistence tests offered in the existing literature.

The society is better off if there are more opportunities to invest in Thai firms run by founding family members. The finding of the quality difference in governance by firms with founding family members is new. Therefore, the study points to the need of finer partition of the family firms while looking at their corporate governance practices. The fact that the FF firms offer a higher quality of earnings implies that they are less engaged in opportunistic manipulation of earnings and cash flow and, thus, are self-motivated to protect the longer term interest of the firms.

This if the first time the accounting fundamental valuation theory has been used to provide evidence of higher earnings quality.

We extend the recent literature concerning accounting based valuation models to investigate financial firms from six European countries with substantial financial sectors: France, Germany, Italy, Netherlands, Switzerland and the UK. Not only are these crucial industries worthy of study in their own right, but unusual accounting practices, and inter‐country differences in those accounting practices, provide valuable insights into the accounting‐value relationship. Our sample consists of 7,714 financial firm/years observations from 1,140 companies drawn from 1989–2000. Sub‐samples include 1,309 firm/years for banks, 650 for insurance companies, 1,705 for real estate firms, and 3,239 for investment companies. In most countries we find that the valuation models work as well or better in explaining cross‐sectional variations in the market‐to‐book ratio for financial firms as they do for industrial and commercial firms in the same countries, although Switzerland is an exception to this generalization. As expected, the results are sensitive to industrial differences, accounting regulation and accounting practices. In particular, marking assets to market value reduces the relevance of earnings figures and increases that of equity.

Outlines the role of the conservatism inherent in generally accepted accounting principles in Ohlson’s (1995) and Feltham and Ohlson’s (1995) valuation models and compares it with other research findings. Identifies potential sources of conservatism (e.g. expensing advertising costs, providing for deferred tax etc.), develops a mathematical model and applies it to 1980‐1994 US data to examine their relative importance. Finds that intensity of R&D and age of fixed assets are the most significant and goes on to compare the effectiveness of the Feltham/Ohlson conservatism parameter in capturing this information. Shows that their linear information models seems to capture different aspects of the relationship between book and market values and calls for further research.

This paper seeks to examine the relationship between corporate governance and the value‐relevance of accounting information in Australia.

This paper uses board, audit committee and external audit related variables to proxy for corporate governance. Value‐relevance is measured by the adjusted R² derived from a regression of stock price on earnings and equity book values following Ohlosn's accounting‐based valuation framework.

Regression results show that firms with strong governance structure exhibit higher value‐relevance of accounting information. Results further show that firm‐specific economic variables are important determinants of the value‐relevance of accounting information.

Significant regulatory reforms regarding corporate governance around the world give an impression that regulators believe that governance plays a key role in ensuring, among others, credible financial reporting. This paper provides support for such a view in Australian context.

This paper uses the relationship between accounting numbers and share price as the measure of accounting information quality and also considers the impact of ASX Corporate Governance Best Practice Code on the changes in the value‐relevance of accounting information.

This paper reports an attempt to design a free cash flow version of the cash flow statement. In specific, the paper relates the comprehensive income concept to the definition of free cash flows and shows how free cash flows and residual income can be calculated from the cash flow statement.

This paper exhibits how this different version of the cash flow statement can be reported by illustrating the differences with the form of the statement required by the regulatory accounting bodies.

This paper shows that the cash flows resulting from operating and investing activities are exactly equal to the cash flows received by debt and equity holders (financing activities) by using a simple definition of a company's free cash flow.

The method used requires a different version of a cash flow statement in which all financing related cash flows, such as interest expense is not included in the cash flow from operating activities. This version of the cash flow statement can be used in order to evaluate and appreciate financial policy formulation.

The paper provides to the shareholders and all the parties who are interested in firm and its operation (managers, lenders etc) with information about the company's ability to distribute dividends, to issue new debt and in general the company's ability to meet its obligations.

Intellectual capital, as used here, is a concept that deals with intellectual property concepts, like patents and licences, but also includes less tangible assets like know‐how, skills and information systems. The need to measure the amount of intellectual capital in an organization has grown in importance. The worth or value of an organization cannot be given by the values in the balance sheet alone. Just as the use of discounted cash‐flow analysis is being accepted as a more reliable measure of value and will eventually replace other accounting‐based valuations, the value of intellectual capital will need to be measured and determined. Intellectual capital will also be a useful concept for setting corporate goals and strategies. Describes some current conceptions of intellectual capital and looks at ways of measuring intellectual capital. Compares intellectual capital valuation with financial cash flow valuation. Suggests that additional studies regarding the measurement of intellectual capital are still needed, and recommends, when good measures of intellectual capital are not available, the use of indicators as a means of indicating that intellectual capital is present or growing.