Værdiansættelse af investeringsejendomme: Det retvisende billede

Camilla Herløv & Rasmus Astrup Christiansen

Student thesis: Diploma thesis

Abstract

The fair value is given by the price of an asset or liability in a transaction between two independentmarket participants at the time of measurement. However, if the transaction is notmade, estimating the fair value of investment properties contains of significant accounting estimates.Many factors have a significant impact on the valuation of investment properties at fair value.This paper will examine how it is possible to value commercial investment properties using thefair value method, in accordance with IAS 40, and still comply with the Danish Financial Act'sinterpretation of the true and fair view.IAS 40.45 describes the process for valuation of investment properties at fair value. The firststeps are to compare the process with a completely comparable property on an active marked.Since it can be almost impossible to find a completely comparable property, IAS 40.46 leads toanother solution on which establish the valuation of discounted cash flow projections based onreliable estimates of future cash flows. There are two models accepted to unify the valuation:"Discounted Cash Flow Model" and "Normal Earnings Model". Factors as rental income, operatingexpenses, including vacancy rent and the net initial yield, are inputs to the two modelsand give the value of the investment properties. The input in the two models are the factors thatare difficult to determine, as they must reflect the trend in the market as well as the expectationsof the future operation.A case study is performed to make analyses of the factors above and to discuss the appropriatenessof the data. In order to identity the most significant factors and factors with a high degreeof subjectivity, a sensitivity analysis is performed. From the sensitivity analysis performed, itis found that both the rental income and exit yield in the valuation model have a significantimpact on the valuation, as only a few discrepancies in the inputs have a significant impact onthe value of the properties.In order to answer the main problem in the paper, both an auditor and a valeur have been interviewed.The interviews are performed to identify how these experts handle the significant uncertaintiesin the factors used as inputs to the valuation models.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2015
Number of pages124