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There is a dramatic increase in the number of companies whose value lies largely in their intangible assets; with relatively little or no value associated with their tangible assets. Traditional methods of valuation, based on accounting principles, where the value of the firm’s assets is a portion of the value, have systematically undervalued companies such as these. This article discusses the problem of valuing intangibles companies and suggests two approaches to determining their value. It also describes two common circumstances where company value is desired and discusses how value may be determined using a non‐traditional perspective on the company along with traditional methods for valuation. The two circumstances examined are the going‐concern value and the value under merger or acquisition circumstances (recognizing that these two circumstances produce very different valuations for the corporation).

When it comes to increasing shareholder value, the management team faces difficult issues in executing growth strategies. The authors explore the three most important shareholder value management factors: managing not only for current operations but for future growth; accounting for and managing intangible assets, one of the key drivers of value in today’s economy; and deciding where to invest resources given the inability of current tools to provide a reliable link between investments and the creation of shareholder value.

This paper aims to identify conceptual changes in the practical application of asset impairment testing methods as required under IAS (International Accounting Standards) 36.

The paper explores general principles for an impairment testing framework, to address impairment issues that arise in valuation practice.

This paper shows that the way value in use is required to be assessed is technically flawed, prone to application error, and creates conceptual and financial mismatches with the requirements of other accounting standards.

From a practical perspective, the consequential scope for valuation errors is further exacerbated by the reluctance of company directors to accept the need for impairment and, in some cases, by gaming.

This paper provides a practitioner's viewpoint to impairment testing under the IAS, and identifies several inconsistencies with the application of the standard.

Neo‐classical economic theory provides the framework for general purpose financial reports prepared by Australian government departments and their agencies. These reports, which include a statement of financial position (financial worth) and an operating statement (an estimate of the return on the investment), have an economic rationale: the information is intended to guide the allocation of scarce government resources. All government assets, including those held for their cultural, historical or environmental values (heritage assets) are to be valued utilizing the neo‐classical theory of value. Argues that the accounting exercise is flawed. Measurement of value‐in‐use or value‐in‐exchange of heritage assets is inherently subjective, ignoring institutional conditions and non‐use values. The accounting approach fails to measure either the service value or economic benefits of governmental heritage assets. Consequently, the information generated is inconsistent with the economic rationale and the valuation process may prejudice any assessment of the performance of entities responsible for these assets. There is a strong case for either widening the concept of value to include non‐use values or abandoning the measurement of heritage assets.

1.1 What Are Accounts For? Overview The purpose of accounts is to reveal performance in the conduct of a business or other activity concerned with use of economic resources (e.g. a club). It is thus a matter of stewardship. Although, like economics, it is necessary in accounting to use money as a measure of performance, it is concerned with the individual organisation rather than with economic phenomena as a whole.

Research undertaken by the authors over the last two years has revealed a number of problems in valuing non‐market, non‐investment properties in the public sector. The first part of the article draws together some of the literature in the area of public sector asset valuation and management. This is intended, first, to highlight current thinking about the issues involved in the valuation exercise, second, to focus on some of the unresolved aspects and, finally, to suggest areas for further consideration to help resolve these.The second part of the article provides an introduction to, and critical examination of, the valuation methodology commonly used to value specialised property assets. Possible alternative approaches are suggested, which may better enable authorities to assess the performance of their assets and integrate these into the management processes.

This paper is aimed at studying the technology in buy‐cooperate‐sell decisions process in order to identify and analyse the logical steps that should characterise a complete and reliable appraisal process.

The paper develops a framework to support the whole process, based on literature analysis and an empirical study. A case study is presented in order to discuss some of the theoretical and practical problems affecting the appraiser during a technology valuation.

It is found that the use of the proposed framework: forces the appraiser to perform a systematic and rational analysis, coherent with the internal and external context of the valuation; points out the most critical elements that could lead to a misleading and/or unusable and/or biased valuation; forces the appraiser to solve some critical trade‐offs and to deal with contrasting elements; imposes coherence throughout the process and consistency among the various hypotheses and assumptions needed to finally identify a (range of) final value(s); gives the appraiser a communication tool, as different people are involved during the process; allows people (even if not directly involved in the process) to understand how the value of the asset has been determined and the validity, reliability and precision of the results obtained; and increases the bargaining power of the appraiser during the negotiation with a potential counterpart, allowing a clear and complete understanding of the value of the asset.

This paper analyses the entire process and gives emphasis to the critical aspects of each phase, suggesting some solutions.

The purpose of this paper is to present a methodology for estimating the “price,” or the not-to-loss value, of individual highway assets, which reflects not only the assets’ capital value but also economic productivity, by adopting a productivity-based asset valuation framework. The price tags can be used in prioritizing highway assets in support of transportation asset management processes.

The methodology adopts the utility theory to consider multiple performance measures reflecting the economic productivity generated by the assets, as well as their capital value. Key performance measures are first selected, and their values are retrieved from highway asset management databases. Next, the utility functions representing decision makers’ preferences convert the performance measures into utility values, which adjust the replacement cost (RC) of each highway asset to estimate price tags. To demonstrate its applicability, case studies were conducted for the highway networks of Texas and Washington State in the USA.

The methodology yielded price tags that better reflect the importance of highways’ roles in the economy in comparison to methods where only RCs are used. Furthermore, it was proven to be flexible enough to accommodate local conditions such as varying data availability.

The research provides a practical and reasonable way to prioritize critical highway assets in purport of maintenance and rehabilitation resource allocations, based on their economic productivity as well as physical condition and historical cost information, enhancing the overall efficiency and effectiveness of highway asset management.

The question whether the use of an asset will be terminated before its physical life expires is of interest to financial managers. In other words, purchasing an asset does not necessitate its use until the end of its physical life. An asset might be terminated because it is inefficient to continue operating, or because it can be replaced. Thus, in a single cycle problem, the objective is to determine how long an asset should be employed before termination. In a replacement problem, the focus is on determining how long the asset should be held before being replaced with a similar one.

The purpose of this paper is to examine whether commercial banks manage earnings through their use of Level 3 valuation under The Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements. To achieve this goal, the authors investigate the association between banks' performance and size with the percentage of Level 3 inputs for valuing assets and liabilities. The FAS 157 requires or permits US listed firms to adopt one of the three levels of inputs to measure and report fair values of their assets and liabilities. Level 1 input is based on quoted prices in the active markets; Level 2 is from the observable markets other than quoted prices; while Level 3 is based on unobservable and firm‐generated inputs.

The authors extract information from all the 10Q‐reports submitted by the US commercial banks (SEC Code 6021) for the first two quarters of 2008. Since Level 3 input is subject to the highest level of managerial discretion, this is expected to be an avenue for earnings management. Multivariate regression was applied to test whether the banks' performance and size are associated with a higher level of Level 3 input.

Out of 329 quarterly bank observations, the authors find large banks and poor performing banks with lower returns on assets, lower cash flows, and higher amounts of provision for loan losses, use more Level 3 inputs on valuing their assets and liabilities.

The results suggest that US commercial banks use FAS157 as an avenue for earnings management. The results have implications for the accounting standard setters, banking sector and policy decision makers.

This is the first paper providing evidence that banks use fair value measurements to manipulate earnings.