Valuation of family firms : the limitations of accounting information

Hasso, Tim & Duncan, Keith (2013) Valuation of family firms : the limitations of accounting information. Australian Accounting Review, 23(2), pp. 135-150.

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Abstract

This conceptual paper explores the extent to which reported accounting information captures unique family firm decision-making and intangible asset factors that impact financial value. We review the family firm valuation-relevant literature and identify that this body of research is predicated on the assumption that accounting information reflects the underlying reality of family firms. This research, however, fails to recognise that current accounting technology does not fully recognise the family firm factors in the book value of the firm or the implications for long run persistence of earnings. Thus, valuation models underpinning the extant empirical research, which are predicated on reported accounting information, may not fully reflect the intrinsic value of family firms. We present propositions on the interaction between accounting information, family factors and valuation as a road map for future empirical research with a discussion of appropriate methodologies.

Impact and interest:

4 citations in Scopus
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2 citations in Web of Science®

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ID Code: 54703
Item Type: Journal Article
Refereed: Yes
Keywords: family firms, valuation, intangible assets
DOI: 10.1111/j.1835-2561.2013.00202.x
ISSN: 1835-2561
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2013 Wiley-Blackwell Publishing Asia
Deposited On: 03 Jun 2013 01:09
Last Modified: 09 Aug 2013 05:50

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