White Paper on Fixed Asset Valuation & Fair Value Measurement

Investaura Management Consultants was engaged by a major telecom group to perform a comprehensive valuation on non-current assets in the telecommunications network operations run by the client in four countries.

The revaluation was undertaken in compliance with the IFRS framework, in particular IFRS 13 (Fair Value measurement), IAS 36 (impairment), IAS 16 (tangible non-current assets) and IAS 38 (intangibles).

Whereas writing down non-current assets when their value is impaired is generally standard practice under GAAP, reflecting the concept of prudence, IFRS allows for a re-valuation to both sides, including marking non-current assets up to market. The basis for measurement is either the cost model (historical cost less accumulated depreciation), or the revaluation model (fair market value).

Investaura’s new book is now available on Amazon: “Business Planning for Managers and Entrepreneurs”

Investaura Management Consultants is pleased to announce the publication of its new book on Business Planning for Managers and Entrepreneurs (ISBN 978-3-9813734-2-4), written by Pierre A. Lurin, a Managing Partner at Investaura.

The paperback edition complements the hardback edition first published in 2010, which has been updated and improved. Apart from the new cover, the book addresses a wider audience and includes a foreward where the author shares his recent experience acquired over the period 2010-2014, as well as personal insight on current and future trends.

The project that has two different IRRs

When cash flows are ‘well-behaved’, then the IRR makes more or less sense, because you can argue that it is equivalent to the yield (interest rate) that a bond would pay to bondholders, and the cash flows are the (variable) coupons that you receive, and the Face Value of the bond is the cash flow you receive in the last year (at ‘exit’). Phew!

Let us take a look. In the ideal world, your cash flow stream might look like that, and the IRR is 15% in this case. In the last year, we have simply assumed that the business is sold at 5 times the cash flow generated in the previous year.

Financial ratio analysis: FREE Excel template!

There are 4 main categories of financial ratios and KPIs used by financial practitioners, each addressing a specific question:

Question 1: “Is the business profitable?” -> Profitability ratios, calculated from the P&L (e.g. Gross margin, EBITDA margin, EBIT margin)

Question 2: “Is the business liquid in the short term?” -> Liquitidity ratios, calculated from the Balance Sheet (e.g. current ratio, liquid ratio, cash ratio)

Question 3: “Is the business financially stable in the long term?” –Stability ratios, calculated from the Balance Sheet (e.g. debt-to-equity ratio, gearing, debt cover ratio)

Question 4: “Is profitability high enough compared to what we have invested?” –Capital Efficiency ratios (e.g. ROE taking an ‘equity’ perspective; ROIC taking an ‘entity’ point of view).

Our highly popular Seminar on ‘Finance for non-Financial Managers’ is coming to you

Have you ever wished that you would better understand Finance and Business Planning? Maybe with a view to take ‘Profit responsibility’ within your company?

Then this seminar is for you.

Accounting and Finance are not hard to learn, and everybody can learn them. The 3-day training will bring you up to speed with the key concepts used in Finance: the difference between cash and profit; key financial ratios; valuation of businesses and investment plans; the cost of capital, and many more.

In addition to trainer-led presentations that are richly illustrated with examples from the Telecoms & IT industry, the participants will solve a series of exercises and work on the ‘TetraStars’ case study.