Valuation of family firms: The limitations of accounting information

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)

Abstract

This conceptual paper explores the extent to which reported accounting information captures unique family firm decision-making and intangible asset factors that impact financial value. We review the family firm valuation-relevant literature and identify that this body of research is predicated on the assumption that accounting information reflects the underlying reality of family firms. This research, however, fails to recognise that current accounting technology does not fully recognise the family firm factors in the book value of the firm or the implications for long-run persistence of earnings. Thus, valuation models underpinning the extant empirical research, which are predicated on reported accounting information, may not fully reflect the intrinsic value of family firms. We present propositions on the interaction between accounting information, family factors and valuation as a road map for future empirical research with a discussion of appropriate methodologies.

Original languageEnglish
Pages (from-to)135-150
Number of pages16
JournalAustralian Accounting Review
Volume23
Issue number2
DOIs
Publication statusPublished - Jun 2013

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Accounting information
Family firms
Empirical research
Factors
Decision making
Persistence
Methodology
Firm valuation
Valuation model
Intangible assets
Roadmap
Intrinsic value
Interaction
Book value
Impact factor

Cite this

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Valuation of family firms : The limitations of accounting information. / Hasso, Tim; Duncan, Keith.

In: Australian Accounting Review, Vol. 23, No. 2, 06.2013, p. 135-150.

Research output: Contribution to journalArticleResearchpeer-review

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