Fair Value Research Articles

Investment Strategies Based on Fundamental Stock Analysis

Fundamental stock analysis is a methodology aimed at researching the financial performance and competitive advantages of a company in order to assess its investment attractiveness. The main focus is on analyzing revenue growth, profitability and sustainability of the company in the market, as well as macroeconomic conditions such as the general state of the economy and market demand. Effective management plays a key role in a company’s ability to overcome difficulties and seize opportunities to increase value. Investors use fundamental analysis to evaluate the company’s financial statements and determine its fair value, which allows them to identify undervalued and overvalued financial instruments. This method includes analysis at three levels: macroeconomic, industry, and company-specific levels, using various financial ratios and multipliers. Thus, fundamental analysis contributes to making informed investment decisions based on an objective assessment of the value of shares.

Pemberian Ganti Kerugian kepada Masyarakat Terkait Pengadaan Tanah untuk Kepentingan Umum

The success of infrastructure projects is closely related to land acquisition/land acquisition owned by the community, it is not even possible for population relocation to occur. The implementation of development that requires land acquisition is basically a waiver of land rights. Land Procurement for Public Interest is regulated by the Government in Law No. 2 of 2012 and Other Legislations. The purpose of this study was to determine the process of land acquisition and the calculation of fair market value as the basis for providing compensation. The research method used is literature studies and displayed descriptive. Compensation is a proper and fair compensation to the rightful party in the land acquisition process. The results of the research found are based on Law No. 2 of 2012, the land acquisition process consists of 4 stages, namely planning, preparation, implementation and submission of results. Meanwhile, to provide an opinion on the value of the land, an appraisal process is carried out by a Public Appraiser as a professional independent appraiser who has a license from the Land Agency. The appraisal process for compensation includes physical (material) and non-physical (immaterial) compensation where the final value obtained by the Appraiser is Fair Market Value.

The Possibility of Applying the Profitability Multiplier Model and the Lerner and Carlton Model to Measure the Fair Value of Private Commercial Bank Shares Listed on the Iraqi Stock Exchange for the Period (2014-2019)

The Possibility of Applying the Profitability Multiplier Model and the Lerner and Carlton Model to Measure the Fair Value of Private Commercial Bank Shares Listed on the Iraqi Stock Exchange for the Period (2014-2019)

Subsequent Measurement for Investment Property: Fair Value Model

Subsequent Measurement for Investment Property: Fair Value Model

Akuntansi Belis dalam Adat Perkawinan Masyarakat Kabupaten Sikka

This research aims to describe the identification, measurement, presentation and disclosure of belis accounting in the marriage customs of the Watugong Village community. This research data was obtained from interviews, observations, documentation and literature studies regarding the stages of belis in the marriage customs of the Watugong village community. This research produces data that can be used as information and consideration in making decisions regarding accounting. The results of this research: identification in Accounting is said to be relevant because in the buying process economic transactions can be identified; This research shows the process of measuring belis, measured using fair value, which is in accordance with the market price set at that time; The researcher presents a journal description and a summary of profits or losses from both parties, which can be used as reference material for future purchasing processes, documentary evidence and economic considerations.

Charity begins at the office: issuing cheap stock and stock options to employees and insiders before going public

PurposePress reports have indicated that firms frequently underprice restricted stock and employee stock options. I test for underpricing of stock and options.Design/methodology/approachI examined a sample of 5,333 private firm stock and option issuances between 1985 and 2017. I tested for underpricing using two approaches: assuming investors have no special market-timing ability and assuming instead they have perfect market-timing ability.FindingsI find evidence of widespread stock and option underpricing by private firms before they go public reflecting large discounts that exceed reasonable compensation for lack of marketability. Unreported underpricing is more frequent in the last pre-IPO private equity transactions that offer the last opportunity to give such discounts before the stock is publicly traded, but the discounts are greater in the earlier pre-IPO transactions where unreported discounts are presumably tougher for the SEC to detect. Underpricing is still detected even when the actual DLOMs are tested against a benchmark that assumes investors have perfect market-timing ability.Research limitations/implicationsFirms frequently underprice restricted stock and employee stock options. Firms tend to underprice stock options more frequently than restricted stock, but restricted stock tends to be priced at deeper discounts when recipients are assumed not to have any special market-timing ability.Practical implicationsPrivate firms issue restricted stock and options as incentive compensation. Lowballing the valuation transfers wealth from outside stockholders to employees/insiders. Wealth transfers take place through the issuance of equity claims to employees/insiders before firms go public. I found that more than a quarter of the DLOMs exceed the theoretical maximum by, on average, between 16% (median) and 20% (mean). This finding raises two questions worthy of investigation. First, to what extent do the frequency and magnitude of DLOMs above the theoretical maximum depend on whether a board of directors obtains an independent appraisal of a stock’s fair market value? Second, if DLOMs above the theoretical maximum are observed even when the stock is independently appraised, how do appraisers justify such large DLOMs?Social implicationsThe wealth transfers that take place through the issuance of equity claims to employees/insiders before firms go public benefit employees/insiders at the expense of outside shareholders.Originality/valueMy paper is the first to furnish evidence of widespread stock and option underpricing by private firms before they go public; demonstrate that the unreported underpricing is more frequent in the last pre-IPO private equity transactions that offer the last opportunity to give such discounts before the stock is publicly traded and show that the discounts are greater in the earlier pre-IPO transactions where unreported discounts are presumably tougher for the SEC to detect.

Exploring the role of heuristics in buyer–supplier relationship dynamics

PurposeThis paper aims to explore the role of heuristics in the reassessment of relationship events and how it influences perceptions of commitment, fairness and relationship value. It answers the question of how heuristics interrelate with decision-makers’ evolving interpretations of commitment, fairness and relationship value in a specific buyer-supplier relationship.Design/methodology/approachThis paper presents data from a longitudinal study of an evolving buyer–supplier relationship involving a multinational supplier of fast-moving consumer goods and a medium-sized and highly specialized supplier. It analyzes qualitative data about the use of heuristics in buyer–supplier relationships, and it is based on evidence collected from interviews, presentations, meetings and secondary data.FindingsThis paper shows that a buyer’s unexpected behavior can lead to a reassessment of commitment, fairness and relationship value. Heuristics can delay relationship reassessments, however. The case shows that heuristics have a preserving quality and that the effect of transformative events only slowly changes the perception of the value of the relationship. In this change process, the link between commitment, perceived fairness and heuristics is crucial.Originality/valueThis paper contributes to research on the relationship between buyer–supplier relationships and heuristics. In particular, the paper contributes to the understanding of how relational events in a buyer-supplier relationship change the commitment and perception of fairness, and how heuristics change accordingly. On a more overarching level, the study contributes to our understanding of business relationship dynamics.

ANALYSIS OF ACCOUNTING TREATMENT OF BIOLOGICAL ASSETS BASED ON PSAK NO. 69 AT LATONANG FARM PAREPARE CITY

This research aims to determine the accounting treatment of biological assets based on PSAK No. 69 at Latonang Farm and to determine the accounting treatment of biological assets at Latonang Farm from a sharia perspective as well as the implications of implementing PSAK No. 69 to the financial statements of Latonang Farm's biological assets. This was done to analyze the suitability of the accounting treatment for Latonang Farm's biological assets with PSAK No. 69. This research uses qualitative methods with a case study approach and field research. The data collection and data processing techniques use observation, interview and documentation methods. The validity test of the data used in this research is the credibility test. Meanwhile, the data analysis techniques used are data reduction, data presentation and drawing conclusions. The research results show that the accounting treatment of biological assets is based on PSAK No. 69 at Latonang Farm is generally in line with the provisions of PSAK No. 69. However, there are differences regarding the measurement of fair value. Latonang Farm does not revaluate the value of biological assets, but instead uses the acquisition price with adjustments at the end of each period. This approach was chosen because of the difficulty of measuring the value of biological assets precisely. This action is permitted in accordance with the provisions of PSAK No. 69 paragraph 30. Apart from that, the accounting treatment of biological assets at Latonang Farm is also in accordance with the sharia perspective, where the principles of honesty, trust and benefit are applied.

Is Reinforcement Learning Good at American Option Valuation?

This paper investigates algorithms for identifying the optimal policy for pricing American Options. The American Option pricing is reformulated as a Sequential Decision-Making problem with two binary actions (Exercise or Continue), transforming it into an optimal stopping time problem. Both the least square Monte Carlo simulation method (LSM) and Reinforcement Learning (RL)-based methods were utilized to find the optimal policy and, hence, the fair value of the American Put Option. Both Classical Geometric Brownian Motion (GBM) and calibrated Stochastic Volatility models served as the underlying uncertain assets. The novelty of this work lies in two aspects: (1) Applying LSM- and RL-based methods to determine option prices, with a specific focus on analyzing the dynamics of “Decisions” made by each method and comparing final decisions chosen by the LSM and RL methods. (2) Assess how the RL method updates “Decisions” at each batch, revealing the evolution of the decisions during the learning process to achieve optimal policy.

Optimizing Teacher Productivity: The Impact of Work Discipline and Compensation

This research aims to explore teacher productivity which is influenced by work discipline variables and the compensation received by teachers. The question asked in this research is how work discipline and compensation influence teacher productivity partially or simultaneously. Second, which variable has the dominant influence on teacher productivity? The method used in this research is qualitative research with a causality approach or cause and effect resulting between the variables being measured. The data collection technique used a questionnaire obtained from 39 teacher respondents at the Ma'Arif Nahdlatul Ulama Talang Prigen Foundation, Pasuruan. The data obtained was subjected to classical assumption tests, as well as hypothesis tests, partial tests and simultaneous tests. The results obtained are that work discipline and compensation have a dominant influence on teacher work productivity, but compensation has a more dominant influence as reflected in the compensation indicator which has a fairness value, making teacher motivation increase and also adequate compensation will increase the attractiveness of talents. new people who want to serve in the institution.

Enhancing agricultural land valuation in land consolidation projects through cooperative game theory and genetic algorithm optimization

The purpose of land valuation in land consolidation projects is to determine the relative value between lands of different quality, location and etc. This principle is crucial for ensuring fairness and justice among participants. Efficient land utilization and rural progress are hindered by the fragmentation of agricultural lands, necessitating land consolidation. However, fair valuation of parcels remains a challenge, impeding the success of consolidation efforts. This study delves into the intricate issues related to land consolidation and complex dynamics of decision-making in agricultural land valuation. This study aims to address the challenge of fair valuation in land consolidation projects by introducing a novel methodology that integrates cooperative game theory with metaheuristic algorithms. The goal is to increase the likelihood of stakeholders accepting land consolidation schemes by utilizing the interactive components of the decision-making process. This approach takes into account individual preferences of land owners and utilizes game theory to model competition, interaction, and cooperation among them. Central to this concept are genetic algorithm, which plays a key role in producing diverse solutions taking into account various landowners' priorities. A case study in Fartan village, Esfarayen city, Iran, is conducted to evaluate the effectiveness of the method. Two scenarios are examined: one combining unanimity fallback bargaining technique with Nash bargaining, and another incorporating fallback bargaining with impasse technique with Nash bargaining. Upon comparative analysis, the second scenario proves to be better in ensuring equity among stakeholders. It encourages landowners to negotiate decisively, using a process that integrates fallback bargaining with impasse and Nash bargaining, taking into account the varying levels of each owner's negotiation power in both steps. This ensures a negotiated outcome that respects the diverse priorities of each landowner. This scenario considers variations in individual negotiating power not only in Nash bargaining step but also in fallback bargaining and ensures a comprehensive and fair decision-making process during land valuation. This research introduces a novel strategy to enhance group decision-making in agricultural land valuation, fostering stakeholders' agreement and facilitating successful land consolidation projects. The proposed method provides a land valuation approach that can receive high degree of farmers' agreement and provides a good base to enter the next stages of the land consolidation.

The Impact of Corporate Governance and Fair Value Accounting on Debt Contracts

This paper investigates the theoretical relationship between corporate governance, fair value accounting, and debt contracts. It primarily examines the individual impacts of corporate governance and fair value accounting on debt contracts, while also exploring the influence of corporate governance on fair value accounting. The study emphasizes the importance of considering the interests and legal status of creditors in the context of debt contracts. The findings indicate that strong corporate governance can reduce the likelihood of debt default and that the company’s restructuring costs in the event of a default determine whether improved corporate governance will increase or decrease debt costs. Additionally, the study reveals that the strength of corporate governance affects the value relevance of fair value accounting. However, the impact of fair value accounting on debt contracts is not inherently positive or negative; for instance, companies may use fair value adjustments with manipulative intent to enhance performance. Ultimately, the research highlights that discussions about corporate governance should not prioritize shareholder interests exclusively but also consider the legitimate position of creditors.

Addressing coordination problems in residential buyouts: Experimental evidence for managed retreat in the face of climate change-related threats

Voluntary home buyouts can be an effective way to protect homeowners from severe and repeated flood risk while also benefiting the local community by creating flood control areas and reducing local infrastructure costs. Successful implementation of residential buyout programs is complicated by homeowners’ (unobservable) attachment to place and community. In the presence of such preferences, standard posted price offers at fair market value are generally too low to induce a majority of homeowners to move, resulting in spatially fragmented (checkerboarded) buyout patterns, which can be troublesome from both a community and environmental perspective. To help resolve the resulting coordination problem, we experimentally test two acquisition mechanisms from the land conservation literature in the residential flood buyout context, posted price offers and reverse auctions, and pair them with two additional program features, agglomeration bonuses and target constraints (also known as provision points—a threshold required for the buyout to be implemented). Using an induced-value approach, we show that both reverse auctions and agglomeration bonuses are effective at increasing contiguity in this setting by inducing more homeowners to accept buyout offers and to move away from the neighborhood. However, reverse auctions have the advantage of being flexible enough to accommodate heterogeneity in place and community attachment. If external benefits are non-linearly increasing in the number of contiguous residential lots acquired, adding a target constraint to a reverse auction is a potential avenue for effective future buyouts.

The Interplay between Mitochondrial Metabolism and Nasal Mucociliary Function as a Surrogate Method to Diagnose Thyroid Dysfunction: Insights from a Population-Based Study.

Aim and Background. This study aims to explore alternative diagnostic methods to assess thyroid function in patients unable to undergo blood tests for thyroid-stimulating hormones (TSH) and thyroxine (T4), such as individuals with trypanophobia, severe medical conditions, or coagulopathy. Considering the impact of thyroid dysfunction on mitochondrial metabolism and the essential role of proper mitochondrial function in ciliary motility, we postulate that assessing nasal ciliary function could serve as a surrogate diagnostic approach for thyroid dysfunction. Methods. This cross-sectional study was performed on individuals with no history of thyroid diseases. The primary endpoint was the diagnostic value of the nasal mucociliary (NMC) test using Iranica Picris (Asteraceae) aqueous extract in differentiating hypo- or hyperthyroidism cases from euthyroid cases. Results. 232 individuals were recruited (71% females, 86% euthyroid). Receiver operating characteristic (ROC) analysis showed a good diagnostic value for the NMC test in differentiating overt hypothyroidism (area under the ROC curve [AUROC] = 0.82, p = 0.004) and its fair value in diagnosing subclinical hyperthyroidism (AUROC = 0.78, p = 0.01) from the euthyroid condition. The NMC test had a significant positive correlation with TSH (r = 0.47, p < 0.001) and a significant negative correlation with T4 (r = -0.32, p < 0.001). The NMC rate was significantly different in distinct thyroid function groups (p < 0.001). Compared with euthyroid cases, the post-hoc analysis showed that the NMC test is significantly higher in overt hypothyroidism (15.06 vs. 21.07 min, p = 0.003) and significantly lower in subclinical hyperthyroidism (15.05 vs. 10.9 min, p = 0.02). Conclusions. The Iranica Picris-based NMC test might serve as a diagnostic method to distinguish overt hypothyroidism and subclinical hyperthyroidism.

The development of international accounting and auditing standards for fair value accounting in the Arab Middle East, Jordan: a systematic review

The development of international accounting and auditing standards for fair value accounting in the Arab Middle East, Jordan: a systematic review

Whether Managers Bias Fair Value Estimates for Investment Property to Meet/Beat Analysts’ Earnings Forecasts?

Whether Managers Bias Fair Value Estimates for Investment Property to Meet/Beat Analysts’ Earnings Forecasts?

Do one’s moral foundations impact how they respond to information on climate change emissions? A vehicle choice experiment

Transportation is a major source of climate change emissions. Providing people with better information on those emissions is one means of helping individuals make climate-friendly choices. However, not everyone is influenced by the same type of information. Previous research has demonstrated that Goal Framing Theory could help improve the influence of climate change emissions information and that different framings have different levels of influence depending on a number of socio-demographic and attitudinal characteristics. However, apart from climate change motivation, what other underlying psychological factors might help us understand why the framings vary in their influence between individuals? Moral Foundation Theory (MFT) identifies key values that influence people’s moral decisions, providing a useful framework for understanding diverse responses to information. The objective of this study is to understand whether MFT can help explain different responses by individuals and identify which framings are associated with stronger responses for different moral foundations. This study investigates the moderating effects of moral foundations on individuals’ responsiveness to different emission information framings. Utilizing data from discrete choice experiments involving 2015 Canadian drivers, we examine how different moral foundations impact the willingness-to-pay (WTP) for reducing emissions. The results reveal that the impact of emissions information framing varies significantly according to individuals’ moral foundations. Specifically, moral values associated with Authority, Fairness, and Purity play negative moderating roles on WTP for CO2 emissions under different framings, whereas Ingroup and Harm foundations have positive moderating effects on WTP with the framings tested. Additionally, innovative communication tools like new emojis demonstrated strong positive effects on WTP, especially among those with strong Ingroup, Fairness, and Purity values. Conversely, individuals with a strong Authority value showed the lowest WTP when presented with pressure gauge visuals. Using appropriate framing based on Moral Foundation Theory can considerably change the willingness-to-pay for climate change emissions for different parts of the population, with a notable increase in WTP observed among individuals inclined to alter their behavior. Future framings should incorporate MFT in their design.

Navigating Reversed Valuation Dilemmas: SME Enterprises Nationalized in 1950s Poland - A Case Study

The publication describes a problem that often arises in court cases regarding the valuation of SME forcibly nationalized in the 1950s. Valuation of compensation to previous SME owners is an ongoing court debate in Poland. The authors proposed an approach that took into account the economic conditions at that time and complied with the principle of paying compensation for the actual losses incurred, and not for the potential losses that could be incurred as a result. At the same time, the publication analysed other similar judgments in cases regarding compensation for nationalized enterprises. The practical and scientific value of the publication lies in the fact that it addresses an existing practical problem and its solution. Research Design &amp; Methods: the paper presents a conceptual proposal of the SME valuation method in unique circumstances, complemented by a detailed case study illustrating the application of this valuation approach. Findings: When calculating the compensation for nationalization or other forms of expropriation courts use various methods of valuing net assets (fair market value, book value, recreation value) plus separately determine the value of intangibles, such as licenses, based on the discounted average profits from such assets for a reasonable period of time. If indexation was employed (for historical cost valuation), it used either average interest rates in the economy, the cost of capital of a company, or the cost of lost opportunities for a particular company. Using discounted cash flow valuation for the entire business was uncommon and even if it was included in the bilateral investment treaties (which were meant to protect investors from expropriation) it was considered by the tribunals as speculative and unreliable. Our approach proposes net asset value approach with the use of inflation or average salaries for indexation (to calculate current values of assets) and a combined approach of historical values if they were known at the moment of nationalization and modern estimates of values of remaining assets (that belonged to the company but their value was not provided in the original documentation). Implications &amp; Recommendations: The analysis of historical compensation decisions and bilateral investment treaties suggests that the most popular approach to valuing a loss from expropriation is the fair market value approach and net assets approach with a separate valuation of significant intangible assets provided that they gave certainty of profits for the investor. Contribution &amp; Value Added: The practical and scientific value of the publication lies in the fact that it presents an existing practical problem of court calculation of compensations to owners of forcibly nationalized SMEs in Poland and its solution together with methodological framework that can be used in the future

Fair value and investment property in accounting literature: a review

Purpose This study aims to provide a timely review concerning the determinants and economic consequences of fair value reporting in real estate industry, as these topics have been gaining momentum in accounting literature recently. Design/methodology/approach Diverse editorial sources (e.g. Elsevier, Emerald, Meridian Allenpress, Springer, Sage, Taylor &amp; Francis and Wiley-Blackwell) were consulted to identify relevant studies for this review. Keywords used to collect studies include “fair value” and “IAS 40” or “investment property” and “fair value or “fair value and real estate.” This search yields 33 studies published between 2009 and 2023. Findings The synthesis of reviewed papers suggests that studies were mainly conducted in the European countries after the mandatory adoption of international financial reporting standards (IFRS) in 2005 and the Australian setting. The first stream of research deals with the choice of fair value approach. Reported empirical findings suggest that corporate size and market-to-book ratio are negatively associated with fair value choice, whereas ownership dispersion increases the likelihood of choosing fair value approach. The empirical evidence concerning the determinants of fair value magnitude suggests the type of appraiser represents a key predictor of the extent of fair value use. The second stream of research examines the impact of fair value reporting in real estate industry. Findings suggest that empirical evidence is still limited with respect to creditors, managers and financial analysts; fair value reporting is generally associated with higher level of value relevance for investors; and the use of Level 3 inputs in fair value estimates for investment properties is associated with high degree of estimation uncertainty for external auditors leading to increased audit risk and fees. Practical implications With respect to regulators, this review emphasizes that the beneficial impacts of fair value reporting are linked to institutional characteristics (e.g. legal system, the degree of market development), the reliability concerns regarding fair value estimates and the independence of appraiser. Because real estate industry is generally characterized by the lack of active market, regulators may adopt regulations requiring the independence external appraiser. Originality/value This literature review represents a historical record and an introduction for accounting scholars, in emerging economies and other settings, where fair value accounting has gained wide acceptance among the investment community. It also offers guidance for future research avenues.

Analysis of the Prices of Recycling Byproducts Obtained from Mechanical–Biological Treatment Plants in the Valencian Community (Spain)

Municipal solid waste (MSW) management in Spain, particularly in the Valencian Community, heavily relies on mechanical–biological treatment (MBT) plants followed by landfill disposal. These MBT facilities utilize mechanical processes like shredding, screening, and sorting to segregate recyclables (metals, plastics, paper) from organic material and other nonrecyclables. While public funding supports these plants, private entities manage them through complex, long-term concession contracts. This structure restricts access to crucial data on the sale prices of the byproducts generated during MBT. Publicly available information on relevant company and administration websites is typically absent, hindering transparency surrounding byproduct revenue. This study addresses this gap by analyzing 2012’s available data on revenues obtained from byproduct sales following mechanical treatment at MBT plants within the Valencian Community and comparing them with Spanish national data. This research revealed a significant finding—the statistical distribution of average prices obtained from Ecoembes auctions in the Valencian Community mirrored the corresponding distribution for prices calculated from auctions conducted in other Spanish regions. This suggests a potential uniformity in byproduct pricing across the country. It has also been found that none of the analyzed price distributions exhibited a normal (Gaussian) distribution. The findings also highlight the need for alternative pricing models that move beyond simple averages and account for regional variations and outliers. As actual prices are not available after 2012, this lack of transparency poses a challenge in comprehensively evaluating the economic viability of MBT plants. Furthermore, it raises concerns regarding whether the revenue generated from byproduct sales reflects fair market value. Limited public access to this information can potentially indicate conflicts of interest or inefficiencies within the waste management system.