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March 18, 2026The Accounting Review

The Use of Present Value Valuation Models in Published Accounting Reports.

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Authors

MBMichael BromwichLondon School of Economics and Political Science

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Implication

This analysis examines limitations of present value valuations in accounting reports, suggesting improved focus on fundamental variables.

Key Points

  • The aim is to assess the conditions under which present value valuations can be deemed ideal in accounting.
  • Analyzed existing accounting literature on present value valuations
  • Utilized consumer surplus analysis from economic theory
  • Evaluated investor valuation differences of securities
  • Critically appraised arguments supporting present value use in accounting reports
  • Present value valuations are not universally applicable for all investors and circumstances.
  • Focus on disclosing fundamental variables is recommended over direct present value disclosures.
  • Present value valuations remain useful under specific conditions related to portfolio and capital market theories.

Cite This Study

Michael Bromwich (1977) studied this question.

synapsesocial.com/papers/69ba42cf4e9516ffd37a364ahttps://doi.org/10.2308/tar-4498243
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1A Note on the Discounted Present Value Concept.1977
  2. 2Committee on Accounting Valuation Bases.1972
  3. 3Present Value Models and the Multi-Asset Problem: A Comment.1974
  4. 4Revenue Experience as a Guide to Asset Valuation.1967
  5. 5An Empirical Test of a Model Proposed by Chambers.1971