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The purpose of this paper is to value the patents of pharmaceutical companies using discounted cash flows, and compare the value-relevance of these assets against alternative intangible asset measures such as reported intangible assets and R & D capital.

The study values pharmaceutical intangibles using three methods: an income method; the sum of unamortised R & D expenditures; the firm’s reported intangible assets. Value-relevance tests use ordinary least squares regression and Vuong and Clarke tests.

First, the study finds that the discounted cash-flow valuation of pharmaceutical patents is value-relevant. Second, the value of pharmaceutical patents explains market value better than reported intangible assets but not R & D capital. However, the valuation of pharmaceutical patents is more consistent with the risks of R & D than the valuation of R & D capital which assumes recovery of R & D expenditure.

This is the first known study that values patents using an income method and compares those valuations with reported intangible assets and R & D capital valuation models.

This paper aims to show that the accuracy of real estate portfolio valuations and of real estate risk management can be improved through the simultaneous use of Monte Carlo simulations and options theory.

The authors' method considers the options embedded in Continental European lease contracts drawn up with tenants who may move before the end of the contract. The authors combine Monte Carlo simulations for both market prices and rental values with an optional model that takes into account a rational tenant's behaviour. They analyze how the options significantly affect the owner's income.

The authors' main findings are that simulated cash flows which take account of such options are more reliable that those usually computed by the traditional method of discounted cash flow.

Some limitations are inherent to the authors' model: these include the assumption of the rationality of tenant's decisions and the difficulty of calibrating the model given the lack of data in many markets.

The main contribution of the paper is both by accounting for market risk (Monte Carlo simulations for the prices and market rental values) and for accounting for the idiosyncratic risk (the leasing risk).

Does target firm shareholders excessively paid or adequately rewarded or stumpy compensated? To address this query, the study aims to remix valuation parameters for better combination of mixture so that it represents fair deal value in merger and acquisition (M&A) negotiation process. The purpose of the study is to redesign the existing valuation methods, craft new models and compare them to suggest perceptive guidelines for “valuation governance”.

This research reconstructs discounted cash flows (DCF) and net asset valuations (NAV), originate NRR‐APB approach, MCF‐RS and MCF‐ES and finally compare all seven methods for each select company in the respective industry/sector. Exclusively, estimating the forecasting hurdle rate (FHR) is a core competence of valuation process.

Among the valuation models, all seven methods for select companies have been reported diverse values, however NRR‐APB approach describe factual enterprise value for bargaining the value of target firm in structuring M&A deals.

Due to petite sample, study has limited scope to validate the proposed conceptual models for valuation governance. Particularly, models have developed under the Indian accounting regulations, standards and reporting mechanism. Though, it can be practiced in other accounting standards on trail and error basis.

Valuation practitioners, governments, consultants, M&A advisory, market research and academia may implement these business valuation techniques, guidelines and implications in particular sector/industry to protect the interest of target firm shareholders and justify the consistent value for acquirer/bidding firm. Accordingly, stakeholders' interest could also be sheltered.

The paper intends to introduce NRR‐APB approach, MCF‐RS and MCF‐ES, reengineering DCF and NAV and compare these valuation methods on three companies each in select two industries, auto ancillary and hotels and resorts. Further, it would be adding a token of contribution to the notable area corporate finance. Hence, this article is the first study to argue on valuation governance and recommend state to enact immediately in India.

Proposes to elucidate the relationship between implicit and explicit discounted cash flow (DCF) methods in freehold valuations.

Sets out a calculation of annual growth with respect to a rack‐rented property.

Finds that the advantage of the DCF model is that it makes the assumptions underpinning the valuation explicit.

This shows how the valuer is allowed to analyse the market and to answer not only the question of the price of the property but also the question of whether it is worth that price.

The purpose of this paper is twofold: primary, to argue that the profits method, specifically a discounted cash flow (DCF)-based profits method, should be the preferred method of valuation when valuing specialised property. Secondary, to make technical recommendations in the application of the method.

Literature was reviewed on the theory of the profits method as well as physical valuations performed in practice. Improvements for the profits method are suggested from the review of six valuations conducted in South Africa in the specialised property sectors. A qualitative approach is followed in the research as broad principles are extracted from the valuation reports as implications and improvements for the profits method.

The profits method is more flexible and sophisticated than the cost approach in taking into account systematic and unsystematic risk. The profits method is more accurate than the cost approach in delivering a true reflection of the value of specialised property for any purpose but specifically for mortgage lending purposes and reduces the credit exposure risk of financial institutions. It also decreases pricing inefficiencies to be exploited by buyers and sellers.

Three improvements to the profits method are suggested. First, revenue could be forecasted based on a probability-weighted approach. Second, a modified capitalisation rate is suggested to the capitalisation rate formula in the calculation of G. Third, a market rental aggregation anchoring and judgement-based approach is suggested as rationale for determining the hypothetical rental split.

There seems to be a general lack in literature on the profits method of valuation and its application to specialised properties, specifically a DCF-based approach, with this paper being a technical contribution to the body of knowledge on this topic.

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.

Public and private sector managers make investment decisions under uncertainty. Economic efficiency requires that managers who wish to maximize expected utility use NPV. A field test reports that a lower proportion of public managers (20%) utilize NPV than private managers (46%). This difference is significant at p = .01 in both logistic regression and chi-square tests for three competing, but not mutually exclusive, reasons. First, taxpayers are a primary source of capital. Taxation decisions are primarily political events and inefficiency is less likely to be disciplined by capital withdrawal. Second, it is more difficult to estimate expected benefits and costs. Third, investment decisions are often the result of political, not economic, processes. The objective may not be maximization of NPV.

The BC Buildings Corporation was created in 1977 as the successor to the Ministry of Public Works in the province of British Columbia. Over 22 million square feet of space, owned and leased, is managed by the Corporation. Budgets for all space built by the Corporation are developed through market costing, valuation and economic analysis. Analyses two major development projects recently constructed and/or planned by the Corporation, namely: a residential land subdivision developed on a former correctional prison site, and a major office building. Offers a critique of the advantages and disadvantages of the residual approach to valuation in the context of the projects discussed. Outlines and comments on findings of a survey undertaken by the Corporation on the development and investment industries’ approach to economic analysis and valuation. Summarizes changes made to the Corporation’s approach to major development project analysis as a result of recent experience and the survey, and discusses the future role of valuation and the valuer in major developments.

Intangible assets comprise goodwill and identifiable intangible assets with finite and indefinite lives. Current New Zealand GAAP amortizes intangible assets on a systematic basis over their useful lives, with the proviso that the amortization period for goodwill cannot exceed 20 years. International Financial Reporting Standards (IFRS) do not permit the periodic amortization of goodwill and identifiable intangible assets with indefinite lives. Instead, these intangibles are subject to a periodic impairment test with any impairment recognised in profit or loss. In the absence of an impairment loss, the IFRS rule would increase earnings before interest and tax (EBIT) and earnings (E), but this impact should not affect the value of the enterprise (EV) and the value of the firm’s equity (P). Hence, valuation heuristics for EV/EBIT (enterprise value to EBIT) and PE (price to earnings) multiples, which are commonly used for valuations and which have evolved under the amortization rule, need to be revised downward to adjust for the IFRS‐induced increase in EBIT and E. Our analysis of New Zealand companies with intangible assets indicates that the mean EV/EBIT and PE multiples with amortization of intangibles of 12.403 and 13.586, respectively, decrease to 10.971 and 12.346, respectively, without amortization of intangibles.