Forskelle mellem årsrapportens egenkapital og investors værdiansættelse af egenkapitalen i ejendomsinvesteringsselskaber

Jacob Simonsen & Dennis Andersen

Student thesis: Master thesis

Abstract

Over the last two years, property investment companies have experienced a considerable decline in their market value without reported results having shown the same decline. The thesis of this dissertation is that the reported equities of property investment companies should equal their market value as the most important assets in the form of investment properties are recognised at fair value, just as it is possible to recognise debt at fair value. The basis of the dissertation is to describe the present accounting rules for measurement and presentation of investment properties and the related debt. Subsequently, we have performed a theoretical and practical analysis of the matters which result in measurement differences between reported equity and the market value of the companies. We have moreover carried out a qualitative analysis of whether the annual reports satisfy the information requirements of the investors. The analyses have been made on the basis of a Pan-European examination. The analysis shows that there are in general material matters regarding the measurement of investment properties at fair value and deferred tax which should be adjusted before the fair value of the reported equity equals the market value of the equity. Moreover, the analysis shows that despite the fact that annual reports are prepared under international accounting standards, the quality of the annual reports has still not resulted in uniform financial reporting across European borders. Based on the above analyses, we have analysed the future development of the international accounting standards on the basis of the ongoing discussions in IASB’s fair value project group and draft for new standard on recognition of deferred tax. Based on the above analyses, we have assessed that the development of IASB is moving in the direction that theoretically the reported equity should become more comparable with the equity market value. However, we also conclude in our dissertation that, unfortunately, IASB has not presently any measures on the programme to ensure a more uniform quality of the financial reporting across borders, and therefore as regards the investors’ information requirements the quality of annual reports will remain unsatisfactory.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2009
Number of pages168