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Value Estimates (value + estimate)
Selected AbstractsAccounting Discretion in Fair Value Estimates: An Examination of SFAS 142 Goodwill ImpairmentsJOURNAL OF ACCOUNTING RESEARCH, Issue 2 2006ANNE BEATTY ABSTRACT This study examines Statement of Financial Accounting Standards 142 adoption decisions, focusing on the trade-off between recording certain current goodwill impairment charges below the line and uncertain future impairment charges included in income from continuing operations. We examine several potentially important economic incentives that firms face when making this accounting choice. We find evidence suggesting that firms' equity market concerns affect their preference for above-the-line vs. below-the-line accounting treatment, and firms' debt contracting, bonus, turnover, and exchange delisting incentives affect their decisions to accelerate or delay expense recognition. Our study contributes to the accounting choice literature by examining managers' use of discretion when adopting a mandatory accounting change and by developing and testing explicit cross-sectional hypotheses of the determinants of firms' preferences for immediate below-the-line versus delayed above-the-line expense recognition. [source] Discussion of Accounting Discretion in Fair Value Estimates: An Examination of SFAS 142 Goodwill ImpairmentsJOURNAL OF ACCOUNTING RESEARCH, Issue 2 2006DANIEL A. BENS ABSTRACT Beatty and Weber examine an accounting choice that managers made upon adoption of Statement of Financial Accounting Standards 142: whether to record a goodwill asset impairment as a cumulative effect of an accounting change at the time of adoption or delay the recognition of such an impairment to the future (perhaps indefinitely) when they would be recorded as expenses in earnings from continuing operations. The authors consider several factors that might influence management's reporting of transition effects, including contracting, equity market incentives, and regulatory forces. Participants at the 2005 Journal of Accounting Research Conference questioned whether such a complex accounting decision can be captured with simple linear models and noisy proxy variables, while also speculating upon whether the results would generalize to other settings. In this discussion, I summarize Beatty and Weber's research, highlight its contribution to the accounting literature, and provide a record of the main issues raised by the conference participants. [source] Do Firms Manage Fair Value Estimates?JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2009An Examination of SFAS 142 Goodwill Impairments Abstract:, I find that goodwill write-offs under Statement of Financial Accounting Standards No. 142 (SFAS 142) are associated with future expected cash flows as mandated by the standard. However, there are indications that goodwill write-offs lag behind the economic impairment of goodwill. Additional analysis reveals that the association between goodwill write-offs and future cash flows is insignificant for firms with contemporaneous restructuring. I hypothesize that this finding is due to agency-based motives. Finally, I examine a sample of non-impairment firms in which there are indications that goodwill is impaired. I fail to find convincing evidence that these firms are opportunistically avoiding impairments. [source] Real Options: Meeting the Georgetown ChallangeJOURNAL OF APPLIED CORPORATE FINANCE, Issue 2 2005Thomas E. Copeland In response to the demand for a single, generally accepted real options methodology, this article proposes a four-step process leading to a practical solution to most applications of real option analysis. The first step is familiar: calculate the standard net present value of the project assuming no managerial flexibility, which results in a value estimate (and a "branch" of a decision tree) for each year of the project's life. The second step estimates the volatility of the value of the project and produces a value tree designed to capture the main sources of uncertainty. Note that the authors focus on the uncertainty about overall project value, which is driven by uncertainty in revenue growth, operating margins, operating leverage, input costs, and technology. The key point here is that, in contrast to many real options approaches, none of these variables taken alone is assumed to be a reliable surrogate for the uncertainty of the project itself. For example, in assessing the option value of a proven oil reserve, the relevant measure of volatility is the volatility not of oil prices, but of the value of the operating entity,that is, the project value without leverage. The third step attempts to capture managerial flexibility using a decision "tree" that illustrates the decisions to be made, their possible outcomes, and their corresponding probabilities. The article illustrate various kinds of applications, including a phased investment in a chemical plant (which is treated as a compound option) and an investment in a peak-load power plant (a switching option with changing variance, which precludes the use of constant risk-neutral probabilities as in standard decision tree analysis). The fourth and final step uses a "no-arbitrage" approach to form a replicating portfolio with the same payouts as the real option. For most corporate investment projects, it is impossible to locate a "twin security" that trades in the market. In the absence of such a security, the conventional NPV of a project (again, without flexibility) is the best candidate for a perfectly correlated underlying asset because it represents management's best estimate of value based on the expected cash flows of the project. [source] Optimal Valuation of Noisy Real AssetsREAL ESTATE ECONOMICS, Issue 3 2002Paul D. Childs We study the optimal valuation of real assets when true asset values are unobservable. In our model, the observed value cointegrates with the unobserved true asset value to cause serial correlation in the time series of observed values. Autocorrelation as well as total variance in the observed value are used to calculate an efficient unbiased estimate of the true asset value (the time,filtered value). The optimal value estimate is shown to have three time,weighted terms: a deterministic forward value, a comparison of observed values with previously determined time,filtered values, and a convexity correction for incomplete information. The residual variance measures the precision of the value estimate, which can increase or decrease monotonically over time as well as display a linear or nonlinear time trend. We also show how to revise time,filtered estimates based on the arrival of new information. Our results relate to work on illiquid asset markets, including appraisal smoothing, tests of market efficiency, and the valuation of options on real assets. [source] Optimal Valuation of Claims on Noisy Real Assets: Theory and an ApplicationREAL ESTATE ECONOMICS, Issue 3 2002Paul D. Childs A theory for valuing claims on noisy real assets is developed and applied. Central to the theory is determination of the dynamics for the best estimate of real asset value. The dynamics of the value estimate are shown to differ from the dynamics of the true asset value only in the arrival rate of information. The rate of information arrival in the value estimate can be faster or slower than information arrival in the true asset value, which can lead to unexpected outcomes in the valuation and exercise of options on noisy real assets. The theory we develop is illustrated through an application. An imperfectly competitive market for real estate development is examined, in which agents compete over the timing of lead investment. Information spillover and free,rider incentives are shown to cause significant delay in lead investment. Delay together with a competitive response once lead investment has occurred explain observed patterns of development in gentrified urban land markets and multistage development projects. [source] Flow cytometric differential of leukocyte populations in normal bone marrow: Influence of peripheral blood contamination1,CYTOMETRY, Issue 1 2009R. A. Brooimans Abstract Background: Availability of immunophenotypic reference values for the various leukocyte populations distributed in bone marrow may be helpful to recognize abnormal bone marrow development and, therefore, useful as first screening of individuals with suspected hematological malignancies or other hematopoietic disorders. Methods: A single tube four-color staining panel (CD66abce/CD14/CD45/CD34) together with a predefined gating strategy was utilized to immunologically differentiate the distribution of the major leukocyte populations in bone marrow aspirates of healthy donors. The sample-blood erythrocyte ratio was applied to assess the amount of blood contamination of marrow and account for this in the marrow value estimates. Results: The frequency of the major leukocyte populations in bone marrow of 134 normal donors were for granulocytes: mean, 69.4%; SD, 10.3%; monocytes: mean, 4.7%; SD, 2.3%; lymphocytes: mean, 18.3%; SD, 8.7%. The frequency of the immature cell population that included precursor cells of each of the cell lineages among other cell types were mean 5.0%; SD 2.2%. The mean percentage of CD34 positive cells was 1.5%; SD 0.7%. Our results showed further that the frequency of cell populations, of which the presence is restricted to the bone marrow (e.g., CD34+ progenitor cells), is influenced by the degree of peripheral blood admixture. Between the total immature cells and purity of the bone marrow, there was a significant positive correlation demonstrated, whereas a negative correlation was found between the percentages of both lymphocytes as monocytes and the purity of the bone marrow. Conclusions: With a single tube-staining panel, we obtained reference values for flow cytometric assessment of all relevant leukocyte populations present in bone marrow that can be used as a frame of reference for better recognition of individuals with abnormal hematopoiesis. In addition, we have demonstrated the influence of the degree of peripheral blood admixture in the bone marrow aspirates on those reference values. © 2008 Clinical Cytometry Society [source] Efficient Simulation of P Values for Linkage AnalysisGENETIC EPIDEMIOLOGY, Issue 2 2004Kyunghee K. Song Abstract In many genetic linkage analyses, the P value is obtained through simulation since the underlying distribution of the test statistic is complex and unknown. However, this can be very computationally intensive. A "bootstrap/replicate pool" approach has been suggested that generates P values more efficiently in terms of computation by resampling sums from a small set of simulated replicates for each pedigree. The replicate pool idea has been successfully applied, but, to our knowledge, has never been theoretically studied. An entirely different method for increasing the computational efficiency of P value simulation is Besag and Clifford's sequential sampling method. We propose an algorithm which combines Besag and Clifford's method with the replicate pool method to efficiently estimate P values for linkage studies. We derive variance expressions for the P value estimates from the replicate pool method and from our proposed hybrid method, and use these to show that the hybrid estimator has a substantial advantage over the other methods in most situations. Genet Epidemiol 26: 88,96, 2004. © 2004 Wiley-Liss, Inc. [source] Relative accuracy and predictive ability of direct valuation methods, price to aggregate earnings method and a hybrid approachACCOUNTING & FINANCE, Issue 4 2006Lucie Courteau M41 Abstract In this paper, we assess the relative performance of the direct valuation method and industry multiplier models using 41 435 firm-quarter Value Line observations over an 11 year (1990,2000) period. Results from both pricing-error and return-prediction analyses indicate that direct valuation yields lower percentage pricing errors and greater return prediction ability than the forward price to aggregated forecasted earnings multiplier model. However, a simple hybrid combination of these two methods leads to more accurate intrinsic value estimates, compared to either method used in isolation. It would appear that fundamental analysis could benefit from using one approach as a check on the other. [source] Pikeperch Sander lucioperca trapped between niches: foraging performance and prey selection in a piscivore on a planktivore dietJOURNAL OF FISH BIOLOGY, Issue 4 2008A. Persson The foraging behaviour of planktivorous pikeperch Sander lucioperca during their first growing season was analysed. Field data showed that S. lucioperca feed on extremely rare prey at the end of the summer, suggesting the presence of a bottleneck. In experiments, foraging ability of planktivorous S. lucioperca was determined when fish were feeding on different prey types (Daphnia magna or Chaoborus spp.) and sizes (D. magna of lengths 1 or 2·5 mm) when they occurred alone. From these results, the minimum density requirement of each prey type was analysed. The energy gain for three different foraging strategies was estimated; a specialized diet based on either large D. magna or Chaoborus spp. or a generalist diet combining both prey types. Prey value estimates showed that Chaoborus spp. should be the preferred prey, assuming an energy maximizing principle. In prey choice experiments, S. lucioperca largely followed this principle, including D. magna in the diet only when the density of the Chaoborus spp. was below a threshold value. Splitting the foraging bout into different sequences, however, resulted in a somewhat different pattern. During an initial phase, S. lucioperca captured both prey as encountered and then switched to Chaoborus spp. if prey density was above the threshold level. The prey selection observed was mainly explained by sampling behaviour and incomplete information about environmental quality, whereas satiation only had marginal effects. It was concluded that the observed diet based on rare prey items was in accordance with an optimal foraging strategy and may generate positive growth in the absence of prey fish in suitable sizes. [source] Foraging capacities and effects of competitive release on ontogenetic diet shift in bream, Abramis bramaOIKOS, Issue 2 2002Anders Persson Bream (Abramis brama) undergo ontogenetic diet shift from zooplankton to benthic macroinvertebrates, but the switching size may be highly variable. To unravel under what conditions bream are pelagic versus benthic foragers, we experimentally determined size-dependent foraging capacities on three prey types from the planktivory and benthivory niche; zooplankton, visible and buried macroinvertebrates. From these data we derived predictions of size-dependent diet preferences from estimates of prey value and competitive ability, and tested these predictions on diet data from the field. Planktivorous foraging capacity described a hump-shaped relationship with bream length that peaked for small bream of 67 mm total length. Benthivory capacity increased with increasing bream size, irrespective if benthic prey were visible on the sediment surface or buried in the sediment. From the experimental data and relationships of metabolic demand we calculated minimum resource requirement for maintenance (MRR) for each of the prey categories used in experiments. MRR increased with bream size for both zooplankton and visible chironomids, but decreased with bream size for buried chironomids, suggesting that intermediate sized bream (120,300 mm) may be competitively sandwiched between small and large bream that are more competitive planktivores and benthivores, respectively. Prey value estimates and competitive abilities qualitatively predicted diet shift in a bream population being released from competition. Competitive release did not change the diet of the largest size-class feeding on an optimal diet of benthic invertebrates both before and after competitive release. However, profound diet shifts towards benthic macroinvertebrates were recorded for intermediate size-classes that fed on a suboptimal diet prior to competitive release. Thus, laboratory estimates of size-dependent foraging capacity of bream in planktivorous and benthivorous feeding niches provided useful information on size-specific competitive ability, and successfully predicted diet preference in the field. [source] The Value of Embedded Real Options: Evidence from Consumer Automobile Lease ContractsTHE JOURNAL OF FINANCE, Issue 1 2007CARMELO GIACCOTTO ABSTRACT Under the common assumption of constant interest rates, we show that penalties for early termination of a lease are often structured in such a way that the cancellation option embedded in consumer automotive leases has little value. Furthermore, our estimates drawn from a sample of three popular car models over 1990 to 2000 indicate that the stand-alone value of the lease-end purchase option is, on average, about 16% of the market value of underlying used vehicles, or about $1,462 per contract. Finally, we examine the sensitivity of our option value estimates to model parameters and default risk. [source] Comparing Travel Cost Models And The Precision Of Their Consumer Surplus Estimates: Albert Park And Maroondah ReservoirAUSTRALIAN ECONOMIC PAPERS, Issue 4 2003Nicola Lansdell This study examines different types of Travel Cost Models to estimate and compare the recreational values of two parks in Victoria, Australia: Maroondah Reservoir and Albert Park. Zonal Travel Cost models and a number of different functional forms are used in this study. Standard errors are used to estimate upper and lower bounds for the recreational value estimates, enabling comparison between the precision of the different types of Travel Cost Models and functional forms estimated. The double log functional form city zone Travel Cost Model was chosen as the best estimate for Albert Park's recrea-tional value at $22.9 million per year. Maroondah Reservoir's best estimate is provided by the double log functional form regional zone Travel Cost Model at a value of $2.5 million per year, consider-ably less than that of Albert Park. Albert Park is found to have a comparatively larger ,proximity power' (attracting many more visitors) while Maroondah Reservoir exhibited a larger degree of ,pulling power' (a higher proportion of its visitors travel further distances). [source] Testing for differences in benefit transfer values between state and regional frameworksAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 2 2008John Rolfe Policy makers are often interested in transferring non-market estimates of environmental values from a ,source' study to predict economic values at a ,target' site. While most applications of the benefit transfer process involve an opportunistic search for suitable source studies, there are some examples available of more systematic approaches to developing a framework of values for benefit transfer processes. A key issue in developing such a framework is to deal with adjustment factors, where value estimates might vary systematically according to the context of the trade-offs. Previous research has identified that large differences in scope, such as between national and regional contexts, do affect values and hence benefit transfer. The research reported in this paper indicates that such differences are not significant for smaller scope variations, such as between state and regional contexts. These results provide some promise that systematic databases for benefit transfer can be developed. [source] Valuing New South Wales rivers for use in benefit transferAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2004Mark Morrison The results from seven choice modelling applications designed to value improved river health in New South Wales are reported. These applications were designed to provide value estimates that could be used, through benefit transfer, to value improvements in the health of other rivers within the state. Because of limitations on the number of rivers that could be valued and populations sampled, a pooled model for use in benefit transfer was also estimated. The results indicate that both use and non-use values were found to exist for all catchments. In addition, value estimates were found to differ across catchments when populations resident within catchments were sampled. However, when populations resident outside catchments were sampled for two of these catchments, value estimates were found to be statistically similar. This indicates the importance of valuing improved river health in specific catchments by sampling populations within catchments. Yet, it also indicates that it is less critical to conduct multiple surveys of residents outside catchments to value improved river health. [source] Towards the development of a transferable set of value estimates for environmental attributesAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 1 2004Martin Van Bueren Estimates of environmental values are frequently required as inputs to cost-benefit analyses when evaluating alternative options for managing natural resources. One strategy to avoid the high cost of conducting empirical work when non-market values are involved is to use value estimates from an existing source study and to transfer them to the target context of interest (a practice known as benefit transfer). However, the transfer of values is subject to a host of potential errors and could lead to significant overestimation or underestimation of welfare change. The present paper reports the results of a choice modelling study in which household values for the impacts of land and water degradation in Australia are estimated. A key objective of the present study was to test the validity of transferring estimates derived in a national context to different regional contexts. On the basis of these test results, inferences are made about the impact that differing contexts have on value estimates. The scale of value differences across the different contexts provides a guide for calibrating benefit transfer estimates. [source] | |||||||||||||