Regnskabsmæssig behandling af investeringsejendomme: Er der sammenhæng mellem børsnoterede ejendomsselskabers regnskabsmæssige indre værdi og markedsværdien af selskabet

Henrik Kofod Dich

Student thesis: Master thesis


Investment-properties are used as investment-assets equally to bonds and shares. But compared to bonds and shares, the transactioncost following the purchase of a property are high, and along with the ownership follows a responsibility – therefore investment-properties are primarily purchased on a long-term investment basis. Companies holding investment-properties are due to the long-term perspective, in need of a specific accounting standard in order to give the shareholders a fair view of the value of their shares, during the temporary ownership of a share in an investment-company, and making the investors able to sell the shares at a valid price. The Danish market for investment-properties, has due to the influence of the financial crisis suffered from a lack of transactions in the market followed by an uncertainty to the actual value of investment-properties. The purpose of this examination is to conclude if Danish investment-property companies currently include all relevant information regarding the fair value of the portfolio of properties, and whether the fair-value measurement are accepted by the market, giving a theoretical price/book value of 1. The starting-point of this paper is a definition of the fair-value of an investment-property due the IAS 40 standard, and the IFRS framework. Upon that I will operationalize the practical use of the mathematical capitalized valuation-methods, primarily the use of the DCF-method. Christian Laux & Christian Leuz (2009), states in their article “the crisis of fair value”, that presentation and disclosure are absolute necessities when using fair-value as principle of valuation. The given disclosure must be enlightened with relevance and reliability in mind. Francis (2005) concludes in a study, that higher transparency and higher reliable financial reporting, correlate with lower cost of capital and easier access to capital. With this is mind, and the Laux and Leuz conclusion, the fair-value measuring equals high demands on quality in disclosure and financial reports – and the benefit for the investment-companies is a direct economic incentive due the lower cost of capital, and easier access to capital. Both of the above mentioned incentives are relevant for property-companies, since the activity in these companies relies on a descent investment upon the primary activity commences. Since the activity is highly capital-intensive, the companies are committed to pay interest (cost of debt) and a yield for the investors (cost of equity). The yield of the daily operations is fairly low and highly sensitive of idle tenants, and the risk of other issues related to the ownership of properties. This means, that fair and reliable information regarding the portfolio is a must in order to attract further investment. I have chosen to evaluate the property-related information in a total population of 5 companies. Due to that, it is concluded, that the company with the highest level of information, are the company traded with the highest P/BV. But I also identify other variables that explain the P/BV ratio. For example were 2 of the companies in the population met by tough demands from the banks, which affected the P/BV in a way that ruined the scope of this thesis.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2011
Number of pages97