Company Valuation Under IFRS : Interpreting and Forecasting ...

Contents
Index of exhibits
About the authors
Preface to first edition
Acknowledgments
An IFRS briefing
Preface to second edition
vii
xi
xiii
xix
xxi
xxiii
Chapter One – It’s not just cash; accounts matter 1
1. Introduction – Valuation refresher 1
2. Distributions, returns and growth 3
3. Cash, accruals and profits 13
4. The Economic Profit model 15
5. The real world of specific forecasts 17
6. Introducing debt 18
Chapter Two – WACC – Forty years on 21
1. Risk and Return 21
2. Diversification and portfolio effects 24
3. The problem of growth 34
4. Leverage and the cost of equity 37
5. Building in tax shelters 40
6. Time varying WACC 54
7. The walking wounded – real options 55
and capital arbitrage
8. International markets and foreign exchange rates 68
9. Conclusions on discount rates 68
Chapter Three – What do we mean by ‘return’? 71
1. IRR versus NPV 72
2. Calculating CFROI 76
3. Another approach: CROCI 85
4. Uses and abuses of ROCE 85
Chapter Four – Key issues in accounting and
their treatment under IFRS 87
1. Revenue recognition and measurement 89
2. Stock options 100
3. Taxation 107
4. Accounting for pension obligations 117
5. Provisions 129
v