The Persistence and Market Valuation of Recurring Nonrecurring Items

2010 ◽  
Vol 85 (5) ◽  
pp. 1577-1615 ◽  
Author(s):  
William Cready ◽  
Thomas J. Lopez ◽  
Craig A. Sisneros
Keyword(s):  
Market Value ◽  
The Other ◽  
Market Valuation ◽  
Future Earnings ◽  
Special Items ◽  
Market Values

ABSTRACT: This study focuses on the persistence and market value implications of a subset of nonrecurring charges that are atypical due to repeated occurrence. The increased recurrence of supposedly nonrecurring items perhaps reflects managerial shifting of (more permanent) ordinary expenses to a transitory category or, alternatively, may reflect an environment where these items naturally occur more frequently. Either scenario suggests that these repetitive charges have future earnings implications dramatically different from truly nonrecurring events and should therefore be valued more like a recurring component of earnings. Consistent with this notion, we find that as the frequency of reporting negative special items increases (measured by the presence of multiple prior charges), the persistence of these items significantly increases with respect to future earnings. Our evidence also suggests that the valuation multiple on such charges increases with frequency. That is, the market values “recurring nonrecurring” items more like the other components of recurring earnings.

Special Items: A Descriptive Analysis

2011 ◽  
Vol 25 (3) ◽  
pp. 511-536 ◽  
Author(s):  
Peter M. Johnson ◽  
Thomas J. Lopez ◽  
Juan Manuel Sanchez
Keyword(s):  
Firm Value ◽  
Temporal Frequency ◽  
Descriptive Analysis ◽  
Financial Statements ◽  
Comprehensive Analysis ◽  
The Other ◽  
Future Earnings ◽  
Special Items ◽  
Increasing Function ◽  
Frequency Magnitude

SYNOPSIS We provide a comprehensive analysis of special items and the characteristics of the firms that recognize them. Our analysis reveals that the temporal frequency, magnitude, and persistence of special items has increased significantly in the last 30 years, and that such increases are primarily driven by negative special items. More recently, however, our evidence is consistent with both a decline in frequency and magnitude of negative special items. On the other hand, we find that the frequency of reporting of positive special items, which remained relatively constant through 2002, has increased in more recent years. We also find strong evidence that subsequent special item reporting is an increasing function of the frequency of “prior” special item reporting. Using a random subsample of firms reporting special items, we document that 22 percent of the amounts reported in Compustat do not reconcile with the amounts reported on the firms' actual financial statements. Our comprehensive analysis should be of interest to regulators, academics, and managers interested in the implications of special items on firm-related consequences such as future earnings and firm value. Our examination can also serve as a catalyst for researchers interested in extending this important area of inquiry.

The Value Relevance of Financial and Non-Financial Information

2017 ◽  
pp. 220-245 ◽  
Author(s):  
Amitav Saha ◽  
Sudipta Bose
Keyword(s):  
Value Relevance ◽  
Market Value ◽  
Financial Information ◽  
Market Valuation ◽  
Future Directions ◽  
Book Value ◽  
Research Framework ◽  
Market Values ◽  
Valuation Model ◽  
Different Types

Value-relevance research is an important domain of modern capital market research. Accounting researchers have used the value-relevance research framework in many ways with the aim of measuring whether accounting information has a predicted association with equity market values. One of the most widely used models in value-relevance research is a modification of the Ohlson (1995) market valuation model in which the market value of a firm's equity is presumed to be a function of its book value of equity and abnormal earnings. Furthermore, using the Ohlson (1995) model, accounting researchers have documented the value relevance of different types of financial and non-financial information. Drawing on a selected number of recently published studies that have documented the value relevance of different types of financial and non-financial information, this chapter reviews and integrates recent findings, highlighting challenges and providing future directions for further research in this area.

scholarly journals On the definition of fair value for purposes of IFRS

2021 ◽  
Vol 26 (2) ◽  
pp. 148-157
Author(s):  
Mikhail A. GORODILOV ◽  
Anna A. RADEVICH
Keyword(s):  
Comparative Analysis ◽  
Market Value ◽  
Fair Value ◽  
Market Valuation ◽  
Clear Definition ◽  
Appropriate Use ◽  
Existing Problems ◽  
Market Values ◽  
Different Types ◽  
Definition Of

Subject. This article discusses the issue of defining the Fair Value concept, its similarity and identification with the concept of Market Value. It examines the specifics of each particular value, defines the concept of Fair Value, and analyzes approaches (methods) of fair value valuation, clarifies existing problems of determining fair value for the purposes of IFRS application. Objectives. The article aims to define the notion of Fair Value and appropriate use in accounting, as well as explore approaches to assess fair value. Methods. For the study, we used a comparative analysis. Results. The article says of many inconsistencies in the valuation of fair value, starting with the lack of a clear definition of fair value in IFRS, which is actually identified with the concept of market value. It proposes a refined definition of fair value and identifies fundamental differences between fair and market values, which are based on the procedures used in their assessment. Conclusions. Fair and market values are two different types of valuation. Fair value can be the same as market value, but only if there is an active market available. There is no single concept of Fair Value presented in scientific and special literature. The same approaches are used in fair (IFRS) and market (valuation standards) assessments, but the methods described for each approach are not always the same.

A Screening Attachment for an Amadas Peanut Combine1

1998 ◽  
Vol 25 (2) ◽  
pp. 110-114
Author(s):  
P. D. Blankenship ◽  
J. W. White ◽  
M. C. Lamb
Keyword(s):  
Quality Improvement ◽  
Research Laboratory ◽  
High Capacity ◽  
The Other ◽  
Market Values ◽  
Alternative Method ◽  
Cylindrical Screen ◽  
Foreign Materials

Abstract Some farmers mechanically screen farmer stock (FS) peanuts after combining to remove undesired materials for value and quality improvement. Screening is accomplished with low capacity, portable screens at the field after combining or with high capacity cleaners or screens at buying points. An alternative method for FS peanut screening has been developed cooperatively by Amadas Industries and USDA-ARS, National Peanut Research Laboratory utilizing an experimental combine screening attachment. The attachment is a hydraulically driven, rotating cylindrical screen (trommel) with an axis inclined less than 10° from horizontal during operation. Peanuts are screened with the trommel prior to entering the combine basket, and smaller, unwanted materials are returned to the soil. Thirty-eight lots of FS peanuts averaging 3.27 t/lot were combined throughout all U.S. peanut-producing regions to examine performance. Foreign materials for the screened lots averaged 2.15% less than the unscreened lots (P = 0.05). Hulls were 0.62% less in the screened lots (P = 0.05). None of the other grade factors or market values per hectare were significantly different for runner peanuts. Foreign materials for screened virginia peanuts were 2.44% less than in unscreened (P = 0.01). Loose shelled kernels were 0.44% higher (P = 0.05), hulls 0.67% lower (P = 0.10), and damage 0.56% higher in screened peanuts than in unscreened. None of the other grade factors or market values per hectare were significantly different for Virginia peanuts. Although most grade factors and values per hectare were not significantly different for screened and unscreened peanuts tested, foreign materials were reduced significantly providing needed quality improvement. Possible cleaning costs also could be reduced with the attachment.

Effects of geographical and technological diversification on the development of spatially disaggregated wind and solar power market values  

2021 ◽  
Author(s):  
Manuel Eising ◽  
Hannes Hobbie ◽  
Dominik Möst
Keyword(s):  
Wind Energy ◽  
Solar Power ◽  
Negative Relationship ◽  
Market Value ◽  
Power Market ◽  
Offshore Wind ◽  
Onshore Wind ◽  
Market Values ◽  
Technological Diversification ◽  
Geographical Diversification

<p><strong>Keywords</strong>: Market value, Technological diversification, Geographical diversification, Spatial value factor distribution</p><p>Ambitious climate and energy targets require environmentally compatible energy generation with a high utilisation of renewable energy sources. However, due to the intermittent appearance of wind and PV feed-in, variable renewable energy (VRE) reveals significantly lower market values than conventional dispatchable power (Joskow, 2011). Additionally, with higher VRE shares a significant market value drop of wind and solar power has been observed in recent years as a result of the merit order effect (Hirth, 2013). Moreover, results by Engelhorn and Müsgens (2018) and Becker and Thrän (2018) have indicated regional disparities in empirical market values for Germany.  This poses interest on what exactly drives and how to quantify the development and spatial distribution of VRE market values.</p><p>Against this background, an electricity market model is applied to trace the development of spatial market values based on model-endogenous electricity prices. A special feature of the model is the inclusion of highly regionally disaggregated weather data which allows to investigate effects of different geographical and technological VRE diversification strategies in Germany until 2035 (Eising et al., 2020). The results of this research are threefold:</p><ul><li>Technological diversity: results show a significant decrease in PV and onshore wind value factors as VRE shares increase. Replacing onshore wind energy by offshore wind energy reduces the volatility and counteracts the value drop of onshore wind, offshore wind and PV.</li> <li>Geographical diversity: results indicate that geographical diversification does not necessarily mitigate decreasing VRE value factors. Under specific circumstances, a higher concentration at sites with lower full-load hours and corresponding higher feed-in volatility potentially mitigates positive effects from more spatially distributed generation.</li> <li>Spatial distribution of value factors: for all mitigation strategies and for wind and PV the spatial value factor distribution shows future increases in regional disparities. However, regional value factor disparities are most distinct in case of onshore wind. The analysis reveals two significant drivers: first, a negative relationship between the regional wind capacity density and their regional value factors can be observed. Second, results indicate a negative relationship between site-specific wind feed-in volatility and the value factor.</li> </ul><p> Summarising, the analysis highlights the importance of considering spatial market values in efficiently designing future electricity markets.  </p><p> </p><p><strong>References</strong></p><p>Becker, R., Thrän, D., 2018. Optimal Siting of Wind Farms in Wind Energy Dominated Power Systems. Energies 11, 978. https://doi.org/10.3390/en11040978</p><p>Eising, M., Hobbie, H., Möst, D., 2020. Future wind and solar power market values in Germany — Evidence of spatial and technological dependencies? Energy Econ. 86, 104638. https://doi.org/10.1016/j.eneco.2019.104638</p><p>Engelhorn, T., Müsgens, F., 2018. How to estimate wind-turbine infeed with incomplete stock data: A general framework with an application to turbine-specific market values in Germany. Energy Econ. 72, 542–557. https://doi.org/10.1016/j.eneco.2018.04.022</p><p>Hirth, L., 2013. The market value of variable renewables: The effect of solar wind power variability on their relative price. Energy Econ. 38, 218–236.</p><p>Joskow, P.L., 2011. Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies. Am. Econ. Rev. 101, 238–241.</p>

Intellectual Capital Investment, Stakeholders' Value, Firm Market Value and Financial Performance: The Case of Tunisia Stock Exchange

2013 ◽  
Vol 12 (02) ◽  
pp. 1350010 ◽  
Author(s):  
Hedia Fourati ◽  
Habib Affes
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Capital Investment ◽  
Positive Impact ◽  
Stock Exchange ◽  
Value Added ◽  
Market Value ◽  
Market Valuation ◽  
Using Data

The purpose of this paper is to investigate the role of intellectual capital investment in improving the firm's market value, stakeholders' value and financial performance. Using data drawn from 21 listed companies in Tunisia Stock Exchange, we conducted two studies. On one hand, from using Charreaux (Charreaux (2006). La valeur partenariale: Vers une mesure opérationnelle. Cahier de FARGO no. 1061103, November) measure of stakeholders' value, we demonstrate that financials come to present the weakest stakeholders' value and clients monopolises in term of value acquisition due to a weak ability of negotiation of firms. On the other hand, we construct a regression model of Pulic's value added intellectual capital investment (VAIC) as the measure of the value added from intellectual capital, in market valuation and financial performance. Our results stressed the fact that there is a positive impact of intellectual capital by human capital efficiency and capital employed efficiency on improving firm's market value. Nevertheless, financial performance measured by ROA is still justified by the traditional measure relying on capital employed efficiency. Indeed for Tunisian quoted firms, human capital investment is a pilar for ameliorating firm market valuation of financial performance.

scholarly journals Periculum maris come il valore contrattuale nel diritto romano

2019 ◽  
pp. 15-31
Author(s):  
Zuzanna Benincasa
Keyword(s):  
Economic Value ◽  
Market Value ◽  
The Other ◽  
Roman Law ◽  
Joint Gain ◽  
International Commerce ◽  
High Interest ◽  
Classical Scheme ◽  
Special Category

For persons who wanted to invest their resources in international commerce, the necessity of a sea voyage significantly increased the risk connected to this venture. Thus the contracts, which took into account the risk related to navigation, constituted under Roman law a special category of contracts, as they modified standard contracts such as a loan or a partnership contract. In the contract of maritime loan the fact that the creditor assumed the risk of losing money in case the condition si salva navis pervenerit was not fulfilled and in exchange could claim high interest to compensate him for such risk transforms this contract into an instrument used for the joint gain of profits. The classical scheme, in which all partners were obliged to share both profits and losses was modified by a partnership contract, in which a partner whose contribution involved exclusively undertaking risky sea voyages was exempt from bearing losses. This pactum made it possible to treat pecuniary contributions and in-kind contributions as equivalent in value. This prevented a situation in which the partner whose sole contribution involved services, in spite of due performance of his obligations, would be liable to repay a part of the loss to the partner who brought capital, if the activity of the partnership resulted in the loss. A typical example, referred to by jurists, of a situation in which services performed by a partner justified discharging him from participating in the loss, was the case in which one of the socii financed the purchase of goods to be subsequently sold with profit in another port, while the other one carried out this venture risking his life during the sea voyage. Therefore, undoubtedly, services entailing a dangerous sea voyage constituted a good example of a partnership, in which the value of a contribution of opera was even greater than the value of the capital invested, and this justified releasing one of the partners from participation in the loss. Therefore, the risk related to navigation, and more specifically the willingness to assume it, starts to be considered as having a certain economic and market value. This value constitutes a special periculi pretium, that is to be taken into consideration in a contract relationship. The acknowledgement by Roman jurists that the willingness to assume the risk connected with certain types of business constituted an economic value, means that the importance of such factors as the partner’s efficiency, resourcefulness, or willingness to embark on a risky activity (in most cases crucial for a success of an enterprise) – was fully appreciated.

scholarly journals Comparative Analysis of Determining the Market Value of Forest Real Properties Using Various Valuation Techniques

2018 ◽  
Vol 26 (1) ◽  
pp. 51-62
Author(s):  
Małgorzata Buśko
Keyword(s):  
Forest Management ◽  
Market Value ◽  
Management Plan ◽  
Forest Resources ◽  
Forest Stand ◽  
Individual Tree ◽  
Market Values ◽  
Significant Difference ◽  
Forest Management Plan ◽  
Survey Approach

Abstract The paper presents procedures for determining market values of forest real properties, with particular emphasis placed on the forest stand. The mixed-approach valuation procedure - land valuation index method - was analyzed. The practical part of the work regarding the valuation of the forest stand introduces the various techniques of valuation and acquisition of data on forest resources used, i.e.: index-based valuation approach and stock survey approach. The subject of the research is part of a forest property, which represents an assessment area, typical of the southern part of Poland, located in the Tenczynek Forest Division. There is a forest management plan for the analyzed property which, together with the assessment descriptions, was used as one of the sources of data for valuation. The second source of data for valuation were direct field surveys, i.e.: geodetic surveys for determining the assessment area and the stock survey approach with individual tree assessment with respect to data on the stand. Based on the research, it may be concluded that both valuation techniques and methods used to capture data on forest resources significantly affect the final value of forest properties. The market value of the stand, determined by the index-based valuation approach, demonstrates a significant difference when compared to the value of the stand determined by the stock survey approach. The forest management plan should only be used as a supplementary material and only to identify site types of forests by property valuers and, partially, together with economic maps, to determine the boundaries of assessment areas.

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