Time Value of Money and Fair Value Accounting. Dr Jae K. Shim

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СКАЧАТЬ Disclosures

       Eligible Items at Effective Date

       Available-for-Sale and Held-to-Maturity Securities

       Not-For-Profit Organizations

       Where Are Fair Values Used in Financial Statements?

       Fair Value Valuation

       Examples of Valuation Models

       Market Multiples

       Stock Valuation

       Bond Valuation

       Real Estate Valuation

       Matrix Pricing

       Discounted Cash Flows (DCF)

       Employee Share Options

       The Black-Scholes-Merton Option Pricing Model

       Other Lattice-based Option Models

       Binomial

       Trinomial

       Multinomial

       Nontransferability and Early Exercise

       Adjusted Replacement Cost

       Illustrations of Fair Value Disclosures – Reliability Assessment

       Appendix I

       Table 1: The Future Value of $1.00

       Table 2: The Future Value of an Ordinary Annuity of $1.00

       Table 3: The Present Value of $1.00

       Table 4: The Present Value of an Ordinary Annuity of $1.00

       Table 5: The Present Value of an Annuity Due of $1.00

       Table 6: Monthly Installment Loan Payment

       Table 7: Normal Distribution Table

       Appendix II: Excel Financial Functions

       Appendix III: Annual Reports - Sample Fair Value Disclosures

       Marathon Oil 2011 Annual Report

       15. Fair Value Measurements

       Fair Values – Recurring

       Fair Values – Nonrecurring

       Fair Values – Financial Instruments

       Walt Disney Co. 2010 Annual Report

       16. Fair Value Measurement

       Fair Value of Financial Instruments

       Transfers of Financial

       Assets Credit Concentrations

       Marathon Oil 2008 Annual Report

       17. Fair Value Measurements

       Textron2008 Annual Report

       Note 10. Fair Values of Assets and Liabilities

       Assets and Liabilities Recorded at Fair Value on a Recurring Basis

       Glossary

       Index

       Preface

      Fair values are more common in financial reports because fair values have increased in business importance in recent years. Increasingly elaborate financial instruments and risk management practices have created financial statement elements for which historical cost is almost irrelevant, and fair value, and fluctuations in fair value, are extremely relevant.

      According to the FASB’s recent guidance on fair value measurements ASC820-10-5 (FAS-157, Fair Value Measurements), Level 3 hierarchy accepts fair values estimates based on present value of expected future cash flows. Furthermore, CPAs must have a working knowledge of the time value of money (future value and present value concepts) because of their application to numerous types of business events and transactions which require proper valuation and presentation.

      Time value of money is also a critical consideration in financial and investment decisions. For example, compound interest calculations are needed to determine future sums of money resulting from an investment. Discounting is used to evaluate the future cash flow associated with capital budgeting projects. This book aims at presenting the time value tools and techniques that are necessary for fair value measurements and for various financial decision making. Furthermore, this book is a comprehensive survey of fair value accounting with a discussion of : (1) ASC 820, Fair Value Measurements and Disclosures, (2) A list of the financial statement items for which fair value reporting is required or allowed. (3) A variety of valuation models, and (4) Fair value disclosure requirements.

       About the Author

      Dr. Jae K. Shim is a professor of business at California State University, Long Beach and CEO of Delta Consulting Company, a financial consulting and training firm. Dr. Shim received his M.B.A. and Ph.D. degrees from the University of California at Berkeley (Haas School of Business). Dr. Shim has СКАЧАТЬ