scholarly journals Usefulness of fair valuation of biological assets for cash flow prediction

2017 ◽  
Vol 47 (2) ◽  
pp. 157-180 ◽  
Author(s):  
Josep Maria Argilés-Bosch ◽  
Meritxell Miarons ◽  
Josep Garcia-Blandon ◽  
Carmen Benavente ◽  
Diego Ravenda
Keyword(s):  
Cash Flow ◽  
Flow Prediction ◽  
Fair Valuation

scholarly journals FAIR VALUATION OF INSURANCE LIABILITY CASH-FLOW STREAMS IN CONTINUOUS TIME: APPLICATIONS

2019 ◽  
Vol 49 (2) ◽  
pp. 299-333 ◽  
Author(s):  
Łukasz Delong ◽  
Jan Dhaene ◽  
Karim Barigou
Keyword(s):  
Cash Flow ◽  
Continuous Time ◽  
Financial Risk ◽  
Explicit Solutions ◽  
Financial Risks ◽  
Practical Applications ◽  
Risk Margin ◽  
Hedging Strategies ◽  
Fair Market ◽  
Fair Valuation

AbstractDelong et al. (2018) presented a theory of fair (market-consistent and actuarial) valuation of insurance liability cash-flow streams in continuous time. In this paper, we investigate in detail two practical applications of our theory of fair valuation. In the first example, we consider the fair valuation of a terminal benefit which is contingent on correlated tradeable and non-tradeable financial risks. In the second example, we consider a portfolio of unit-linked contracts contingent on a non-tradeable insurance and a tradeable financial risk. We derive partial differential equations (PDEs) which characterize the continuous-time fair valuation operators in these two examples and we find explicit solutions to these PDEs. The fair values of the liabilities are decomposed into the best estimate of the liability and a risk margin. The arbitrage-free representations of the fair values of the liabilities are derived and the dynamic hedging strategies associated with the continuous-time fair valuation operators are also established. Detailed interpretations of the results, which should be useful both for researchers and practitioners, are provided.

scholarly journals Predicting Cash Flow From Operations: Evidence On The Comparative Abilities For A Continuum Of Measures

2011 ◽  
Vol 17 (3) ◽  
Author(s):  
Charles E. Jordan ◽  
Marilyn A. Waldron
Keyword(s):  
Conceptual Framework ◽  
Cash Flow ◽  
Prediction Models ◽  
Petroleum Industry ◽  
Cash Flows ◽  
Predictor Variables ◽  
Accrual Accounting ◽  
Operating Cash Flows ◽  
Flow Prediction ◽  
Cash Basis

Prior studies have attempted to confirm or reject the FASB's assertion in its Conceptual Framework that accrual accounting measures provide better information for predicting cash flows than do cash basis measures.  However, their results proved largely inconclusive and contradictory.  The current study identifies research constructs that may be driven these inconsistent findings and makes adjustments to mitigate their effects.  Univariate cash flow prediction models are developed for companies in the petroleum industry using a continuum of predictor variables.  In predicting operating cash flows, one variable, net earnings plus depreciation and amortization, consistently achieves superior results.

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