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I hope I find you in GooD health. I got few questions to ask like:
1. Is it true that Terminal value refers to Future value in investment appraisal techniques and it is also called ‘Final value’?
2. Is it correct that Fair value refers to estimate value of an asset at the time of sale agreed upon by the buyers and sellers while the Market value refers to the price of an asset in the stock exchange?
3. Is it also correct that the term ‘asset’ can be used interchangeably to stocks, shares, property, PPE or basically any investment whatsoever. (Let me know if i forget any that we learn in acca papers)?
4. When we evaluate any business then what factors is considered that influence the real worth of the business that is taken into account before any business take over.
5. Similarly is it true that when we value subsidiary business we evaluate its worth by considering the overall ‘net assets’ of the subsidiary which depends on several factors like Share capital, share premium, retained earning, post-acquisition profits, Goodwill, Purchased intangible assets and Fair value adjustments (which is a wide term that i do not completely understand) so do we have any other factors apart from them that we consider in exam or in the real life?
Thanks for your well-responded answers previously ??
Terminal value refers to the future value of an investment or asset at the end of a specified period.
True Fair value refers to the estimated value of an asset at the time of sale, which is agreed upon by both the buyers and sellers.True The term “asset” can indeed be used interchangeably to refer to stocks, shares, property, and other investments. In ACCA it generally encompasses any resource or economic benefit that is owned or controlled by an entity.
True When evaluating a business for a potential takeover, several factors are considered to determine its real worth.
These factors may include the financial performance and profitability of the business, its market position and competitive advantage, the quality of its assets and liabilities, the potential for future growth and cash flow generation, the industry and market conditions, and any legal or regulatory considerations.
The specific factors considered may vary depending on the nature of the business and the objectives of the potential acquirer.True When valuing a subsidiary business, the overall net assets of the subsidiary are indeed considered. This includes factors such as share capital, share premium, retained earnings, post-acquisition profits, goodwill and fair value adjustments. Fair value adjustments refer to the adjustments made to the subsidiary’s assets and liabilities to reflect their fair market values at the time of acquisition.
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