Developing a Paradigm for Fair Valuation in Tehran Stock Exchange

Advances in Mathematical Finance and Applications

مقاله 8، دوره 2، شماره 2، شهریور 2017، صفحه 81-96   

نوع مقاله: Research Paper

شناسه دیجیتال (DOI): 10.22034/amfa.2017.531320

نویسنده

Hamidreza Shammakhi

Department of Management, Islamshar Branch, Islamic Azad University, Tehran, Iran.

چکیده

The concept of value is of great importance for investors. The goal of different groups of investors is always to maximize the value of their capital. The aim of this research is developing factors effective on securities in capital market in order to develop a paradigm for fair valuation that leads investors to make better decisions. To study fair value in a precise and comprehensive way, effective variables are divided into three main categories. First: evaluation variables including cash flow (income quality), discount rate, and earnings per share; second: intra-organizational variables of corporate governance including the type of ownership (the number of institutional investors), management quality (the number of boards in charge or centralized management as well as the number of  non-in charge board of directors or decentralized management), the amount of reward, compensation and quality of organizational structure; third: variables relating to reporting quality such as offering reliable and on time information. Other variables such as firm size and operation cycle (complexity of business environment) have also been studied. And according to selected sample, methods and statistical analysis, a paradigm for fair valuation has been developed.

کلیدواژه‌ها

Paradigm؛ valuation؛ Fair Valuation؛ Stock؛ Exchange Organization

مراجع

[1] Barth, M. E., Beaver, W. H., Landsman, W. R., Value-Relevance of Banks’ Fair Value Disclosures Under SFAS 107, The Accounting Review, 1996, 71, P.513-537.

[2] Barth, M.E., Including Estimates of the Future in Today’s Financial Statements, Accounting Horizons, 2006, 20 (3), P. 271-285.

[3] Beasley, M.S., Carcello, J.V., Hermanson, D.R., Fraudulent Financial Reporting: 1987-1997- An Analysis of U. S. Public Companies. Research Commissioned by Committee of Sponsoring Organizations of the Treadway Commission. Available at www.coso.org/publications/FFR_1987_ 1997.PDF, 1999.

[4] Benston, G. J. Fair Value Accounting: A Cautionary Tale from Enron,  Journal of Accounting and Public Policy, 2010, 25, P. 465-484.

[5] Riedel, E., Ramesh, K., & Thiagarajan, S. R., Fair Value Disclosures by Bank Holding Companies, Journal of Accounting and Economics, 2010, 22, P. 79-117.

[6] Christian, L., Did Fair Value Accounting Contribute To the Financial Crisis?, Journal of Economic Perspectives, 2010, 24(1), P. 93-118.

[7] Compensation Expense Disclosed Under SFAS 123?,  Review of Accounting Studies, 2013, 11, P. 429-461.

[8] Tariverdy, D., Poorzamani, D., Daghani, R., Relation to the residual income method, discounted cash flow, adjusted earnings in the fair value of companies listed in Tehran Stock Exchange, 2012.

[9] Financial Accounting Standards Board (FASB), Qualitative Characteristics of Accounting Information. Statement of Financial Accounting Concepts No. 2. Stamford, Connecticut: FASB, 1980.

[10] Financial Accounting Standards Board (FASB). Fair Value Measurements. Statement of Financial Accounting Standards No. 157.. FASB. Available at http://www.fasb.org. Accessed on August 30, 2008.

[11] Foster, J. M., & Upton, W. S., Measuring Fair Value. Understanding the Issues 3 (Series 1). Available at http://72.3.243.42/articles&reports/UI_vol3_se ries1.pdf, 2010.

[12] Chen, J., Hong, H., Forecasting crashes: Trading volume, past returns, and conditional skewness in stock prices, Journal of financial Economics, 2001, 61(3), P. 345-381.

[13] Hosseini, M., Role of institutional shareholders as one of the most important criteria for corporate governance changes in the market value of the shareholders' review, 2012.

[14] Penman, S. H., Financial Reporting Quality: Is Fair Value a Plus or a Minus? Accounting and Business Research, Special Issue: International Accounting Policy Forum, 2007, 4, P. 33-44.

[15] Thorsten, S., Fair Value & Audit Fees, Research Seminar Accounting & Management, Feb 2011.

[16] Watts, R.L., Zimmerman, J.L., Positive Accounting Theory. Englewood Cliffs, New Jersey: Prentice Hall, 2005.

[17] Zheng, Y., Fair Value Accounting For Financial Instruments, Business Review, 2005.

[18] Zijl, T., Whittington, G., Deprival Value and Fair Value: A Reinterpretation and Reconciliation. Accounting and Business Research, 2011, 36 (2), P. 121-130.