Insights from practice.

How residual-value estimates affect Ayvens’ leasing profits, and why longer observation periods change the assessment of forecasting accuracy.

Principal-versus-agent accounting and cost-to-cost revenue recognition: how pass-through site fees can shift a CRO’s reported revenue and margins.

How regulatory assets and tax timing affect utility earnings, illustrated through Iberdrola and National Grid and the changes discussed under IFRS 20.

An option-style approach to SpaceX’s valuation, exploring uncertainty, limited downside and the gap between a base-case estimate and expected equity value.

An accounting assessment of the issues raised around Ottobock: EBITDA, Russian operations, capitalised development costs and useful lives.

Why stronger business economics can coincide with lower reported earnings: an examination of commission revenue and accounting estimates at Ethos Technologies.

Why operating and financial leverage can amplify a short squeeze: an option-based look at Avis and the asymmetric risk of its equity.

Why Schrödinger’s move from perpetual licences to subscriptions can depress reported software revenue during the transition under IFRS 15 and ASC 606.

A closer look at Gerresheimer’s right-of-use assets, lease liabilities and disclosed interest rates, and the accounting questions their development raises.

(Not only) in my opinion, the seminal and still most relevant paper about bitcoin accounting practice was written about three …

Schneider-Neureither & Partner SE (SNP) is a German software company, mainly active in the field of data transformation solutions. The …

In one of our former blog posts we had a look at the accounting functioning of equity-settled stock option programs …

As a consequence of the experiences made during the great financial crisis 2008/09 the IASB changed financial instruments accounting away …

In 2011, the International Accounting Standards Board (IASB) disclosed a whole package of new and revised standards that all addressed …

Belgian football is one of the most attractive in the world, even though the national first league is not so …

Dealing with stock options (employee stock options ESOs or employee stock option programs ESOPs) in business valuation is not easy. …

Equinox Gold Corp (EQX) is a Vancouver, Canada, -based mid-tier gold producing company with operations in the US, Mexico and …

London-based Babcock International Group Plc. is a multinational engineering support services company with a strong exposure to public clients. The …

It is not a big secret that coronavirus has hit the airline industry massively. Flight traffic down to super-lows and …

In our most recent blog post we have already given some first comments on the Viceroy-Grenke-case HERE. We think some …

Yesterday, short-seller Viceroy attacked MDax-listed leasing company Grenke AG (HERE). Today it raised some more allegations (HERE). One important point …

In 2019, the IASB issued an Exposure Draft: General Presentation and Disclosures in which the board laid out its proposals …

Preface: This article provides a deliberately abstract and simplified account of recent news and press releases. In its main features …

The Wirecard case provides a lot of lessons for analysts and investors. However, one aspect has not been discussed a …

This problem can really bring a dishonest manager’s decision making process to a breaking point: Overstating revenues (and hence earnings) …

During the last days we got a lot of questions about what EY could have seen and what is beyond …

There is an old saying in financial statement analysis: A good balance sheet is mostly even better, and a bad …

Thursday, 18 June 2020, marked the preliminary peak of the story of Wirecard, the German DAX-listed payment processing company. That …

It is not a big secret that fixed costs are the real ugly thing for companies in crisis. While leading …

Continental AG (Conti) did not show any goodwill impairments in Q1/2020 (only some minor asset impairmets). However, in contrast to …

Times of crisis always bring out two distinct kinds of bad accounting behavior (along with a lot of good accounting …

Preface: I know that there are some readers who are mainly interested in accounting topics. And those will be served …

No matter whether it is about currencies or commodities: operating hedging requires two big decisions. First decision: how much volume …

When Michael Jensen published his “Free Cash Flow Hypothesis” in 1986 (‘Agency Costs of Free Cash Flow’, Corporate Finance and …

On 10 April 2020, the IASB has issued a paper intended “to support the consistent application of requirements” in IFRS …

These days, investors and analysts have to devote plenty of effort in order to get a better understanding of how …

The German Institute of Public Auditors' Technical Committee for Business Valuation and Economics (FAUB) has issued a recommendation on applying valuation models during the coronavirus crisis …

Crises are times of change and of uncertainty. For equity investors this requires some fresh thinking on fundamental analysis (see …

On page 1 of its Commission Regulation (EU) 2016/2067, 22 November 2016, the European Union commented in the context of …

As an add-on to our first part of the Covid-10 Fundamental Company Analysis Manual (HERE) we today provide the second …

In a very interesting article about the analytical state of the new lease accounting under US-GAAP and IFRS, the always …

The new Coronavirus (Covid-19) is roiling the stock markets. The virus changes the fundamental outlook for many business models and …

It is reporting season these weeks! Best time for a little numbers game (for another recent numbers game see our …

Northgate Group Plc. is UK’s biggest provider of light commercial vehicle rental services, with operations in UK, Spain and Ireland. …

Sometimes inventory is a pure pass-through, such as for typical trade businesses. Sometimes it is developed and transformed via work …

In the past, we already shed some light on the problems of reading the appropriate information from segment reportings of …

Telefonica Deutschland (TEF DE) is a German based telecommunication company and network operator. It serves roughly 50 mio customers, most …

Abengoa S.A. (now bust) applied this technique heavily, Carrillion plc (now bust, see LINK to our former blog post [only …

In 2018, Cyan AG, a provider of network-integrated security solutions, acquired 100% of I-New Unified Solutions AG from Austrian gambling …

In one of his latest posts, Aswath Damodaran put his fingers on a quite interesting side-effect of the well-known Softbank/WeWork …

Change is part of doing business. Today more than ever. And where there is change in the business there is …

We know a couple of investors who once scratched their heads about the Chemring Group Plc. 2011 annual report (reporting …

In this blog we recently discussed some cases where the concept of control (HERE) or the existence of related-party transactions …

(English version of the VALUESQUE German blog post, 14 February 2019) As a starting point today, we do a little …

On 16 October 2019, short seller Shadowfall issued a report on Eurofins, a Luxembourg-based laboratory services provider, raising several concerns …

IFRS is quite clear on what should be reported in the income statement for determining operating profit measures: Everything that …

Unilever has just announced a couple of days ago that they have changed the way of how to tackle hyperinflationary …

The German transportation-focussed engineering company Schaltbau Holding AG went through a deep performance valley during the last years. With ca. …

(English version of the VALUESQUE German blog post, 4 February 2019) Impairments and what investors can read from them is …

On 15 August 2019, General Electric (GE) has been hit by a research report written by former Bernie-Madoff-whistleblower Harry Markopolos …

It is summertime, not too busy, and hence a good opportunity to have a look at some topics which are …

On 26 July 2019 Renault S.A. published its half-year figures. Many investors and analysts were surprised by the relatively high …

The IASB and the FASB have one important red line when it comes to intangibles accounting: With a couple of …

In my recent articles on financial analysis (see https://valuesque.com/aktuelles/) I mainly focussed on some fundamental analyses that should show whether …

What can companies do if the end-customer market is simply too small for their ambitious revenue goals? They can simply …

While Tongaat Hulett LTD was standing close to the top of our accounting watch-list for a long time (and we …

In the beautiful BMW Group Classic location in Munich the Accounting Standards Committee of Germany (Deutsches Rechnungslegungs Standards Committee, DRSC) …

M&A accounting is certainly one of the trickiest playing fields in accounting for a couple of reasons: 1) It is …

On 13 and 14 June 2019, the IVSC-WAVO Global Valuation Conference 2019 took place in Frankfurt in front of a …

The 17th Annual Business Valuation Forum, organised by Handelsblatt-Fachmedien and the German Institute of Public Auditors (IDW), took place in Frankfurt on 6 June 2019. …

As we all know, companies often provide their own view on performance measures which not rarely differ quite a lot …

Two recent presentations addressed closely related and highly topical subjects: valuing digital business models and valuing young technology companies. …

In the famous 1959 Billy Wilder movie “Some like it hot” the former Saxophone player and notorious impostor and gambler …

Sometimes stories are better told short. But not so when it is about IFRS 16, the new standard on lease …

When it comes to business valuation for legal purposes, three points seem clear to me: fair compensation for minority shareholders and similar …

End of 2018 it was finally done. The Swedish telecoms operator Telia Company AB managed to get rid of one …

The full-day Start-up Valuation seminar, organised with EACVA, recently took place in Vienna for the third time. A full house of 16 participants! …

The idea of the Standard Setters was straightforward. In order to allow investors a focus on recurring, business-related and controllable …

No, business is not developing in a great way for Domino’s Pizza Group Plc (DOM). A weak Scandinavian business, high …

(English version of the VALUESQUE German blog post, 29 January 2019) Properly understanding financial statements is highly important for everybody, …

The last months have seen a couple of new kids in “pension valuation” town (in terms of ideas, not of …

There is an old rule of thumb in financial analysis: The end of the cycle is near when companies start …

The British bank Barclays Plc had a reasonably good year in 2015, reporting a pre-tax profit of GBP 2.1 billion. …

In a few days, Germany's two major utilities with nuclear exposure, RWE AG and E.On SE, will …

A brief calculation to begin with: what is the expected value of a cash flow of €100 that has an 80% probability of being received …

Financial statement analysis is an essential skill for anyone working seriously with business valuation, whether for investment decisions, fairness opinions or …

Financial statement analysis is an essential skill for anyone working seriously with business valuation, whether for investment decisions, fairness opinions or …

Financial statement analysis is an essential skill for anyone working seriously with business valuation, whether for investment decisions, fairness opinions or …

A strong grounding in academic research is valuable, particularly when dealing with investment valuation or business valuation. …

EACVA's annual business valuation conference (www.bewerterkonferenz.de) is the leading platform in the German-speaking world for exchanging new insights into …

The annual EACVA business valuation conference (www.bewerterkonferenz.de) took place in Düsseldorf on 22–23 November 2018. It is the main industry gathering for everyone involved in …

More than 350,000 business successions were expected in Germany by the end of 2022, involving businesses of all sizes. …

Business succession is a highly sensitive process, whether it involves a management buyout, a sale to external buyers or …

What companies communicate under ‘Value-Based Management’ in their annual reports often has little to do with the actual …

Ten years after the collapse of Lehman Brothers and the onset of a major financial crisis, fears of …

Workshops and presentations on sustainability, ESG and … were provided for investors, analysts and other valuation professionals from the Society.

In recent years, investors would, on average, have fared considerably better by choosing a passively managed product such as …

Outsourcing can make sense when it enables services to be obtained more effectively, more quickly or at lower cost. But it is always important to …

Anyone discussing reputation and values in business should first consider the hard numbers. And …

Socially responsible investing, ESG integration and impact investing are far more than passing trends. They represent a movement that is steadily …

Donald Trump, the outstanding manager? He certainly has his strengths, but there is little that cannot also be learnt elsewhere …

Unfortunately, the world is not that simple. Doing good does not automatically make a company's shares a stellar investment. …

Take the cash flows, discount them, and the valuation is complete. Unfortunately, it is rarely that simple. Value is often …

Volkswagen AG is frequently in the headlines for corporate governance scandals, minor controversies or inefficiencies. One of the …

Hardly a week goes by without a student approaching me with a new start-up idea …