What price a private company?
Article Abstract:
Calculating the value of a private company is a difficult process requiring attention to all relevant elements, particularly the bargaining strength of both vendor and purchaser. Many transactions are based on an earnings-based valuation, analyzing the potential future earnings of the company by assessing the company's assets for their ability to generate profits. A earnings-based valuation model focusing on pre-tax earnings and simple multiples is based on three stages: identifying sustainable earnings; identifying and adjusting for surplus assets; and capitalizing sustainable earnings. Purchasers must protect themselves from distortions of reported profits, misrepresentations, and insufficient disclosure of earnings potential.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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Accounting for life assurance: truly fair or fairly true?
Article Abstract:
The accounting framework for UK life insurers was developed in the 19th century and there have been complaints that annual accounts do not truly indicate the financial performance of life insurance companies. If the European Community directive on insurers' accounts is made into UK law, insurers will have to adopt standard formats for their balance sheets and revenue accounts. The development of a system that adequately reflects annual financial performance will need to consider: the influence of the Department of Trade and Industry on supervisory returns; the statutory restrictions on long-term insurance fund transfers; and the difficulties of reflecting the long business cycle.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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