Inventory valuation, company value, and the uncertainty principle

Catherine Whelan, Simone Kelly, Raymond McNamara, Jasper Verkleij

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Abstract

One of the key elements to the operation of capital markets is information efficiency (Ball and Brown 1968). Both the IASB and the FASB frameworks emphasize decision usefulness,particularly to investors in capital markets, as the primary focus of general purpose financial statements. While theoretically, market values are determined by estimating discounted cash flows (Copeland, Weston et al. 2005; Brealey 2007), practical observations suggest a role for accounting information in the valuation process. Market information suggests that practitioners use the accounting performance measure “earnings” for firm valuation and determination of share prices.
Original languageEnglish
Title of host publicationProceedings of the 2011 AFAANZ Conference
EditorsS Cahan
Place of PublicationMelbourne
PublisherAccounting and Finance Association of Australia and New Zealand
Number of pages24
Publication statusPublished - 2011
EventAccounting and Finance Association of Australia and New Zealand (AFAANZ) conference - Darwin, Darwin, Australia
Duration: 3 Jul 20115 Jul 2011
http://www.afaanz.org/conferences

Conference

ConferenceAccounting and Finance Association of Australia and New Zealand (AFAANZ) conference
Abbreviated titleAFAANZ 2011
CountryAustralia
CityDarwin
Period3/07/115/07/11
Internet address

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  • Cite this

    Whelan, C., Kelly, S., McNamara, R., & Verkleij, J. (2011). Inventory valuation, company value, and the uncertainty principle. In S. Cahan (Ed.), Proceedings of the 2011 AFAANZ Conference Accounting and Finance Association of Australia and New Zealand.