Cross Border Valuation Case Study

9645 Words 39 Pages
Register to read the introduction… Since then twenty new accounting standards were issued by the Ministry of Finance of the Russian Federation aiming to align accounting practices with IFRS. Despite these efforts essential differences between national accounting standards and IFRS remain. Since 2004 all commercial banks have been obliged to prepare financial statements in accordance with both national accounting standards and IFRS. Full transition to IFRS is delayed and is expected to take place from 2011.
Singapore: In Singapore the Accounting Standards Committee (ASC) is in charge of standard setting. Singapore closely models its Financial Reporting Standards (FRS) according to the IFRS, with appropriate changes made to suit the Singapore context. Before a standard is enacted, consultations with the IASB are made to ensure consistency of core principles.
South Africa: All companies listed on the Johannesburg Stock Exchange have been required to comply with the requirements of International Financial Reporting Standards since 1 January
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Treasuries and yield dollar denominated foreign government bonds. The end result is a DCF value denominated in U.S. dollars. * 2. The second approach is to discount foreign cash flows using a foreign WACC, and then translate the foreign DCF into a dollar DCF using the spot exchange rate. However, a major drawback to this method is that betas are not estimated for many stocks in emerging markets, so often the only way to estimate Beta accurately is to obtain quality and reliable market data of the country (which might not be available in developing countries).
b. (ii) Cross border mergers and acquisitions are playing an important role in the growth of international production. Generally, the basic merger or acquisition is the same worldwide; however, undertaking a cross-border transaction is more complex than those conducted ‘‘in market’’ because of the multiple political and country risks
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Cost basis is a major concern when it comes to determining values in multiple foreign comparables of across borders mergers and acquisitions. The costs of political risk, inflation and deflation, foreign exchange rates, tax rates and capital market segmentation can become very large if they are not considered in the valuation of the merger or acquisition. It can be difficult to calculate definitive numbers when accessing such variables as political risk and capital market segmentation for across borders mergers and acquisitions. However, research, history, and educated estimates of the quantifiable values of those factors make the cost basis calculations

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