Verkligt värde i praktiken: En studie av tillförlitligheten vid fastighetsvärdering till verkligt värde
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
The ongoing harmonization process aims to incorporate IFRS regulations into the Swedish accounting. As a consequence investment property’s starting from 2005 may be valued using the fair value method, in accordance to IAS 40. This involves major changes for listed property enterprises that from now on can value a large extent of their assets to fair value. All parties don’t appreciate this progress, opponents to fair value have expressed great concern that fair value don’t work in practice. They claim that fair value measurement is too subjective and unreliable, and that it will malfunction during periods of financial turmoil. Further they claim that it is not suitable with the European accounting tradition, consisting of a high degree of conservatism and prudence.
This thesis aims to examine the accuracy of fair value measurement in the case of Swedish investment property firms. This is done by identifying realized value changes in the corporate annual reports, which will indicate how well the estimated value is consistent with the realized exit price of the property.
The findings of this thesis indicate that there exist an average deviation of 11,6 percent between the book value and the realized exit price. Further this study finds no evidence that the financial turmoil in 2008 complicates the use of fair value in any significant way. However, the study provides a clear indication that conservatism and prudence still influence Swedish accounting. This given that 94 percent of the book values were lower then the realized exit price.
Place, publisher, year, edition, pages
2013. , 35 p.
IAS 40, Fair value, Conservatism, Investment property
IdentifiersURN: urn:nbn:se:oru:diva-29641OAI: oai:DiVA.org:oru-29641DiVA: diva2:630824
Subject / course