dc.contributor.author | Wang, Pengguo | |
dc.contributor.author | Ashton, David | |
dc.contributor.author | Peasnell, Ken | |
dc.date.accessioned | 2013-05-30T13:50:51Z | |
dc.date.issued | 2010-06-25 | |
dc.description.abstract | Existing empirical evidence suggests that residual income valuation models based on
historical cost accounting considerably underestimate equity values. One possible
explanation is the use of historical cost accounting under inflationary conditions. In
this paper, we use a residual income framework to explore theoretically how historical
cost accounting numbers need to be adjusted for inflation in forecasting and valuation.
We demonstrate that even in a simple setting where inflation is running at a relatively
low level, residual income models are likely to produce severe under-valuations if
inflation is not properly taken into account. We use simulated data to reinforce our
theoretical findings and to illustrate the difficulties that empirical investigators face
working within the confines imposed by real data. | en_GB |
dc.identifier.citation | Volume 20, Issue 3, pp.459-483 | en_GB |
dc.identifier.doi | 10.1080/09638180.2010.493661 | |
dc.identifier.uri | http://hdl.handle.net/10871/9717 | |
dc.language.iso | en | en_GB |
dc.publisher | Routledge/Taylor & Francis | en_GB |
dc.subject | Inflation | en_GB |
dc.subject | Residual income valuation models | en_GB |
dc.subject | Information dynamics | en_GB |
dc.subject | historical cost accounting | en_GB |
dc.subject | current cost accounting | en_GB |
dc.subject | simulations | en_GB |
dc.title | Residual income valuation models and inflation | en_GB |
dc.type | Article | en_GB |
dc.date.available | 2013-05-30T13:50:51Z | |
dc.identifier.issn | 0963-8180 | |
dc.description | This is an Author's Original Manuscript of an article whose final and definitive form, the Version of Record, has been published in the European Accounting Review in 2011 [copyright Taylor & Francis], available online at: http://www.tandfonline.com/. Article DOI: 10.1080/09638180.2010.493661 | en_GB |
dc.identifier.eissn | 1468-4497 | |
dc.identifier.journal | European Accounting Review | en_GB |