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Valuation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Valuation

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 6, 2021 at 10:43 am #616073
    student999
    • Topics: 6
    • Replies: 6
    • ☆

    Net asset valuation = total assets – total liabilities/ number of shares OR total equity/number of shares.

    Do we include non-controlling interest as part of equity ?

    April 6, 2021 at 2:07 pm #616090
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49621
    • ☆☆☆☆☆

    No. NCI only appears when producing consolidated accounts. If you are valuing a company then you use the assets and liabilities of that company.

    April 7, 2021 at 8:33 am #616186
    student999
    • Topics: 6
    • Replies: 6
    • ☆

    okay, last question related to book value per share,

    Book value per share = net current assets (or equity) / number of shares

    My question – do we exclude the intangible assets when calculating the book value per share ?

    April 7, 2021 at 8:54 am #616207
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49621
    • ☆☆☆☆☆

    If you are told the book value in the question, then yes.

    However, firstly your ‘formula’ is not current – the book value per share is the net assets (not net current assets) / number of shares. (net assets are total assets including non-current assets less total liabilities including non-current liabilities).

    Secondly, because any question on this will inevitably also require a discussion, then although you would make the point that the book values of non-current assets are generally not very meaningful, the book value of any intangible assets is likely to be even less meaningful.

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