Open AccessEstimation of fair value at balance sheet valuation of a joint-stock deposit listed on the stock exchange
Author(s) -
Jurij Renkas
Publication year - 2019
Publication title -
zeszyty teoretyczne rachunkowości
Language(s) - English
Resource type - Journals
eISSN - 2391-677X
pISSN - 1641-4381
DOI - 10.5604/01.3001.0013.6054
Subject(s) - valuation (finance) , fair value , balance sheet , equity (law) , book value , actuarial science , stock (firearms) , economics , stock exchange , econometrics , financial economics , accounting , finance , engineering , law , earnings , mechanical engineering , political science
The idea behind the research presented in this article is to provide the recipient with reporting informationon the valuation of a joint-stock deposit most appropriate to their expectations. The aim of the publicationis to discuss theoretical aspects of the algorithmic method of valuation of equity investments at fair valueand to present how to use it using a numerical example. The proposed method uses the non-parametricapproach and selection of the normal kernel function. Three approaches to estimating the fair value of equityinvestments were used: (a) calculation of fair value based on data from the end of the reporting year, (b)calculation of fair value at the end of the year, but after the inclusion of data from the month of January,(c) fair value calculation at the end period of attached listings (31 January). The quotations of shares of the joint-stock company KĘTY were used to calculate and illustrate the presented valuation concept. The research results indicated that the fair value of non-parametric regression calculated on the basis of the data until January 2 of the following year, inclusive, should be used as the fair value of the valuation. On the other hand, the value calculated at the end of the month of January of the following year is proposed to be included in the notes to the financial statements to allow the users of the report to gain an opinion about the trend. The presented method is an original approach to the estimation of fair value at the balance sheet valuation of investments containing shares listed on the stock exchange.