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The teaching case is designed to be used by students in higher education institutions at the undergraduate level. This case may also be relevant for staff at the bursary departments of any public universities or public organizations that have biological assets.

This case provides a study on agricultural activity at Universiti Pengurusan Malaysia (UNIPM). The purpose of this case is to create greater awareness for case users on the accounting framework and on methods recommended for recording specific assets in agricultural activity, i.e., biological assets. This case provides users with experience in explaining the nature of an organization’s agricultural activities and accounting for biological assets as recommended in the Malaysian accounting framework. In addition, users are exposed to some current issues in accounting standards, such as ethical issues. In this case, Fakhrul, an accountant at UNIPM and a leader of the Asset Unit, was responsible for reporting the value of all UNIPM’s assets, including biological assets. He was instructed to accurately recognize, measure, and disclose the value of biological assets according to the appropriate accounting standard. Furthermore, UNIPM had been urged to replace the existing accounting standard of the Malaysian Private Entity Reporting Standard (MPERS) with the Malaysian Public Sector Accounting Standard (MPSAS). Fakhrul was considering how to account for and report biological assets according to the new MPSAS. This case is a decision making or ‘unfinished’ case which is suitable for financial accounting and reporting courses. The names of the people and the university are fictitious, but the details were based on actual events. A series of interviews were conducted with the key players to gather the data. Other useful documents such as the university’s annual report, university’s website and the deer reports were also referred.

The primary objective of this teaching case is to provide an opportunity for case users to understand both the accounting framework and the methods recommended for recording specific assets in agricultural activity. More specifically, the teaching objectives of this case are to achieve the following learning outcomes: to identify the relevant accounting standard for recognizing, measuring, reporting, and disclosing biological assets by public universities in Malaysia, to apply the appropriate accounting treatment in recognizing, measuring, reporting, and disclosing biological assets in accordance with the appropriate accounting standard for public universities in Malaysia and to understand the ethical issues involved in deer valuation methods.

Teaching notes are available for educators only.

CSS 1: Accounting and finance.

This case covers the framework and process to determine fair value as specified in International Financial Reporting Standards (IFRS) 13. It illustrates an instance in which auditors interpret the concept of fair value to be consistent with other principles in standards such as the principle of prudence in the conceptual framework. In addition, a lot of the discussion in the case is applicable to accounting education in any regulatory jurisdictions given the convergence of US generally accepted accounting principles (GAAP) and IFRS 13. In addition, while fair value accounting may have been designed to give investors more useful information, in practise it could involve highly subjective judgement and the resulting implementation may be affected by incentives of different stakeholders. The CK Tang’s case provides an excellent opportunity to discuss incentives of varies parties in determining the fair value in financial reporting decisions. In short, this case could be a good jumping-off point to talk about management and auditors’ incentives in financial reporting in general.

Publicly available information (e.g. financial reporting standards, corporate announcements and reports, news reports) was used as the basis for this case.

The case centres on an iconic Singaporean integrated retailing and property landlord entity: Tang holdings. As part of its succession planning, the company’s founding family decided to take its listing arm, C.K. Tang Limited (CK Tang hereafter), private in May 2006. The Tang brothers, who represented the controlling family, initiated several attempts to delist the company. The minority shareholders of CK Tang were unhappy that the offer price was below the net asset value of the company. The minority shareholders also highlighted that the reported fair value of the flagship Tang Plaza complex understated its highest and best use and might not possibly comply with International Financial Reporting Standards (IFRS) 13.

The case can be used for class discussions with undergraduate students or master students in intermediate accounting courses.

The case describes the structure of Infrastructure Investment Trusts (InvITs) created and launched in Indian markets in 2017. Besides introducing InvITs and their potential role in relaxing the financing constraint created by the lack of an active corporate debt market in India, the case can help in analysing why the market is discounting the IndiGrid unit price relative to its issue price. It also offers an opportunity to value IndiGrid's Patran acquisition.

This study aims to provide students an opportunity to analyze the financial performance of a publicly listed real estate company and estimate its instinct value by applying appropriate financial models and approaches.

Three major valuation models/approaches generated by financial theory and practice to estimate the intrinsic value of a security: discounting cash-flows valuation (DCF and NPV) – valuation through adjusted net asset and liquidation value (NAV) – relative valuation through price and value multiples (valuation multiple analysis and precedent transactions analysis). Wholly owned subsidiaries versus and joint venture ones.

Analyze financial information of all segments in a multiple-business firm, and apply suitable financial models and approaches among net asset value model (NAV), discounted cash flow (DCF) or net present value (NPV) model, valuation multiple analysis and precedent transactions analysis to estimate the intrinsic value of the whole firm.

This decision-based case allows students to explore the business valuation process for a public listed real estate company, Alexander & Baldwin, Inc. (NYSE: ALEX). Based on financial statements analysis and forward-looking financial expectation on ALEX, this case elevates students' understanding and practice of valuating this multiple-business firms by applying appropriate financial models and approaches among NAV, DCF or NPV, valuation multiple analysis and precedent transactions analysis and enable students to make their investment decisions of buying, holding or selling the company’s stocks.

This case is most appropriate for graduate courses such as corporate finance, investments, personal finance, real estate finance and financial markets and institutes.

The director of equipment finance at Burlington Northern Railroad Company must decide if a leveraged-lease proposal is acceptable. The case emphasizes the importance of the lessee's tax status to the value of the lease and how the perception of residual value affects the valuation for both the lessee and lessor. To value the lease properly, the student must identify the relevant cash flows and the appropriate discount rates for those flows.

Analysis of public sources.

The bank named “Novo Banco” (New Bank in Portuguese) was created because of an emergency intervention by the Bank of Portugal to save the “good” assets of the once great but bankrupt Banco Espírito Santo (BES) on August 4, 2014. The toxic assets remained in BES (dubbed “bad bank”). BES was one of the biggest private banks in Portugal, with origins mounting back to the year 1869. In 2013, it was headed by the founder’s great-grandson, Ricardo Salgado, when an external audit revealed several problems with the bank’s accounting and concluded that BES had a severe financial problem (the risky credit represented 11.1% of the bank’s accounts). The bank underwent a public capital increase (endorsed by several public figures, including the Portuguese President at the time, Cavaco Silva) of €1.045m to reposition itself, which was 100% successful (demand of about 160%, with a significant part of foreign investors). However, continued amounts of suspicions led Ricardo Salgado to be replaced by Vitor Bento (via a settlement between BES’s shareholders and the Bank of Portugal) in July 2014. At the end of that same month, BES announced imparities totaling the amount of €4.2535m. This led the European Central Bank to suspend BES’s access to the financial operations, forcing it to reimburse its credit to the Eurosystem in the value of €10.000m. In two days, the stock prices dropped by 80% to around €0.03 per share. It was later proven that the administration led by Ricardo Salgado had disobeyed the Bank of Portugal 21 times between December 2013 and July 2014, apparently acting against the institution’s best interests. Some carousel schemes with companies within the Espirito Santo Group were also detected in BES’ financial movements to improve the bank’s financial statements.

Finance Valuation, Strategy

In August 2007 the Mainsail II SIV-Lite was frozen by its trustee as a result of the ongoing credit crisis. The state of Maine held $20 million of Mainsail commercial paper in its Cash Pool portfolio, a short-term portfolio that puts temporary, excess state revenues to work. When word of the potential loss became public, the Treasurer came under attack. The case introduces the functions of a state Treasury department, with particular emphasis on the investment objectives and guidelines for the cash pool as well as its composition. The case reviews the events leading up to and including August 2007, the month when the credit markets first began to seize and when the financial crisis effectively began. It examines securitization, structured finance, and the Mainsail SIV-Lite structure in some detail.

An estimate of the fair rate of return on capital is a critical input into tariff regulation. A too high estimate will lead to high tariffs for consumers; a too low estimate will not provide adequate incentives for investment. The Airport Economic Regulatory Authority of India has issued a consultation paper for finalizing the norms and procedure for estimating the fair rate of return. It now needs to reconcile the differing view and approaches of different stakeholders.

This case can be used to help students achieve the following objectives: To project financial statements and assemble different pieces of financial information to create a valuation model (objective #1, create), To calculate a value for Arcor shares, supporting the estimated value with the chosen assumptions and methodologies (objective #2, evaluate), To draw connections between four different approaches to valuation (DCF, EVA, RV and VI), contrasting them and weighting their advantages and limitations (objective #3, analyze), To examine the relationship between forecasted financial statements and valuation (objective #3, analyze), To discuss the calculation of the Weighted Average Cost of Capital in a new situation as is an emerging economy, with the corresponding country-risk adjustment (objective #4, apply), To discuss the sources of value creation in a family-owned private company in a developing economy (objective #4, apply), To understand the dilemma that the head of a company was facing, identifying the three possible financing alternatives discussed in the text as follows: corporate bonds, earnings reinvestment and an IPO (objective #5, understand). To recall basic facts, as the main character’s opinion on the direction of the local economy or the fact that Arcor already complies with the information requirements of a public company (objective #7, remember).

This case is based on the valuation of the world’s largest candy maker, Arcor S.A.I.C., originally a Latin American company, which remains a private family business. The key problem presented by the case is the use of different valuation approaches to price Arcor shares, in view of a possible Initial Public Offer. The case illustrates the application of four main valuation approaches as follows: Discounted Cash Flow (DCF), Economic Value Added (EVA), Relative Valuation (RV) and Value Investing (VI). Additionally, it includes a fundamental analysis of eight years of historical financial information and the preparation of forecasted financial statements. Set in a developing economy, the Arcor case introduces the complexities of calculating the cost of capital with the inclusion of country risk, as well as the financial analysis distortions caused by an environment of high inflation.

The Arcor case is appropriate to be used in graduate courses of Corporate Finance, Valuation or Private Equity.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

Through the discussion of this case, students will have better understanding of the conceptual stakes related to accounting treatment for goodwill and factors determining goodwill impairment testing. The case also discusses the determination of the cost of capital and the impact of taking into account certain factors related to country risk for determining the discount rate in an international framework.

Greenfields Company continues to expand through acquisitions in emerging markets. The company aims to overcome the complexity of measuring goodwill subsequent to the initial recognition. The case was written to illustrate challenges of estimating the appropriate discount rate to be used in the goodwill impairment testing as investments in emerging countries give rise to many discount rate measurement problems such as the availability of statistical data and the risk assessment to be considered.

The case can be used at undergraduate or postgraduate level and it requires fundamental knowledge in accounting and corporate finance.

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.