This paper investigates which comparables selection method generates the mostprecise forecasts when valuing European companies with the enterprise value to EBIT multiple. We also consider the USA as a reference point. It turns out that selecting comparable companies with similar return on assets...

Numerous empirical studies provide evidence on the value relevance of capitalizing expenditures on intangibles such as research & development (Lev and Sougiannis 1996, Hand 2003). However, accounting standards in many countries, such as the U.S. or Germany, prohibit capitalizing these. In this...

The European insurance industry is currently undergoing a substantial change in financial reporting requirements. Beginning in 2005, compliance with the International Financial Reporting Standards (IFRS) has been required in the European Union. Substantial sections of the IFRS - leading to a...

Standard equity valuation approaches (i.e., DDM, RIM, and DCF) are derivedunder the assumption of ideal conditions, such as infinite payoffs and cleansurplus accounting. Since these conditions are hardly ever met, we provideextensions of the standard approaches based on the fundamental principle...

Performance measures shall enhance the performance of companies by directing the attentionof decision makers towards the achievement of organizational goals. Therefore, goalcongruence is regarded in literature as a major factor in the quality of such measures. Asreality is affected by many...

Residual income valuation is based on the assumption that the clean surplusrelation holds. As pointed out by Ohlson (2000), among others, the standardclean surplus relation is frequently violated. Moreover, standard residualincome valuation models rest on the implicit assumption that future...

When designing incentives for a manager, the trade-off between insuranceand a “good” allocation of effort across various tasks is oftenidentified with a trade-off between the responsiveness (sensitivity, precision,signal-noise ratio) of the performance measure and its similarity(congruity,...

We study a particular class of cost sharing games – "data games" – covering situations wheresome players own data which are useful for a project pursued by the set of all players. Theproblem is to set up compensations between players. Data games are subadditive butgenerally not concave, and...

Our paper deals with the research question wether the association between management accounting system (MAS) design and controllership output quality is made by controllers, i.e. preparers of management accounting information, and managers, i.e. users of management accounting information, in a...

Acknowledging deficiencies in current regulations and aiming at convergence, theIASB is conducting a joint project with the FASB to develop a principle-based standardon revenue recognition. The tentative proposals feature an asset-liability approachrelying on measurement at fair values or at...