Course description

Valuation and Fair Value Accounting

Introduction

Valuation is an important task for research analysts, investment bankers, auditors and accountants, corporate finance specialists, merger and acquisition analysts, venture capitalists, and individual investors. This course provides both a sound theoretical framework for valuation and a thorough discussion of how valuations are actually done in the real world.

Development of valuation skills entails understanding the concepts and procedures underlying generally accepted accounting principles used to prepare financial information.

Course content

1.            Fundamental analysis – the process

2.            The reformulation of the income statement and balance sheet

3.            Forecasting.

4.           Introduction to industry and company analysis.

5.            Cost of capital

6.            Valuation techniques

Discounted dividend valuation

DCF valuation

Relative valuation

7.            Acquisition analysis

8.            Valuation in accounting

Fair value measurement – IFRS 13

Revaluation of PP&E – IAS 16

Measurement of recoverable amounts – IAS 36

Investment property – IAS 40

Biological assets – IAS 41

9             Auditing fair value estimates – ISA 540

Learning outcome knowledge

The objective of the course is twofold. First, students shall acquire general knowledge about techniques to estimate the market value of assets and businesses (valuation methods). Second, they shall learn about the topics for which firms are required to report the fair value of balance sheet items and learn how to apply the valuation methods for that purpose.

Exam organisation

  • Written assignment: 30%
  • Written exam: 70%