REV 3570 Valuation

REV 3570 Valuation

Course code: 
REV 3570
Department: 
Accounting, Auditing and Business Analytics
Credits: 
7.5
Course coordinator: 
Ignacio Garcia de Olalla Lopez
Product category: 
Bachelor
Portfolio: 
Bachelor of Accounting and Auditing - Programme Courses
Semester: 
2018 Autumn
Active status: 
Active
Teaching language: 
Norwegian
Course type: 
One semester
Introduction

Purchase price allocation in accordance with IFRS 3, impairment tests and "fair value accounting" require that an auditor possesses considerable skills in valuation.

In accordance with IFRS 3, the buyer must measure the total acquisition cost and allocate this cost to the acquired assets, both tangible and intangible, to obligations and to contingent liabilities. Under IAS 36, an entity shall conduct tests for impairment of its assets to check if the firm has incurred in impairment losses. In recent years, accounting standards have had an increasing focus on "fair value accounting".

An auditor is also often asked to help with valuations in connection with generational changes, mergers, forced redemption of shares and so forth.

This course provides students with a solid theoretical basis for conducting valuations and will engage the students in thorough discussions on how the measurements are carried out in practice.

Learning outcomes - Knowledge

After completing the course, students will have acquired:

  • Knowledge of the processes related to valuation
  • Understanding of the different valuation models and their weaknesses and strengths
  • Knowledge of how to take into account the risks and taxes in valuation
  • Knowledge about the preparation of relevant forecasts to be used in valuations
Learning outcomes - Skills

After completing this course, students will be able to:

  • Develop relevant forecasts for valuation purposes
  • Determine the rate of return to calculate accounting estimates and the enterprise value
  • Apply valuation models for calculating accounting estimates and the enterprise value
  • Apply recognized methods for calculating the rate of return
  • Analyze and use financial information to make forecasts for valuation purposes
  • Have an understanding of how leverage influences the calculation of the appropriate level of equity capital.
Learning Outcome - Reflection

The students will establish a broad understanding of how various valuation models can form the basis for good decisions, and how such models can be used to support the auditing process.

Course content
  1. Value and value components in a firm.
  2. Financial risk.
  3. Risk adjustment of cash-flow.
  4. Required rate of return.
  5. Profitability analysis.
  6. Forecasting of cash flows.
  7. Cash-flow-based valuation models.
  8. Income-based valuation models.
  9. Valuation using multiples.
Learning process and requirements to students

The course is based on lectures, exercises, cases and hand-ins. 

E-learning
In course delivery as online courses, lecturer will, in collaboration with the student administration, organize an appropriate course implementation, combining different learning activities and digital elements on the learning platform. Online students are also offered a study guide that will contribute to progression and overview. Total recommended time spent for completing the course also applies here.

Software tools
No specified computer-based tools are required.
Additional information

Dersom det er delevalueringer i kurset, og delevalueringene har separate eksamenskoder kan hver av disse deleksamener kontinueres i.

Qualifications

Higher Education Entrance Qualification

Required prerequisite knowledge

Recommended prerequisites are Financial Accounting and Financial Statement Analysis. Alternatively, Management Accounting and Control or equivalent.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
REV35701
Grading scale:
ECTS
Grading rules:
Internal examiner
Resit:
Examination every semester
25No1 Semester(s)Group/Individual (1 - 3)Specific information regarding requirements for the assignment will be given in class.
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
REV35702
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
75Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
Individual Both examination elements must be passed in order to obtain a final grade.
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:25
Invigilation:No
Grouping (size):Group/Individual (1-3)
Support materials:
Duration:1 Semester(s)
Comment:Specific information regarding requirements for the assignment will be given in class.
Exam code:REV35701
Grading scale:ECTS
Resit:Examination every semester
Exam category:Submission
Form of assessment:Written submission
Weight:75
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
Duration:3 Hour(s)
Comment:Both examination elements must be passed in order to obtain a final grade.
Exam code:REV35702
Grading scale:ECTS
Resit:Examination every semester
Exam organisation: 
Ordinary examination
Total weight: 
100
Workload activityDurationType of durationComment student effort
Teaching42Hour(s)Lectures with workshops, supervised exercises in groups
Self study105Hour(s)Work with compulsory literature, exercises, and lecture preparation
Submission(s)50Hour(s)
Examination3Hour(s)
Expected student effort:
Workload activity:Teaching
Duration:42 Hour(s)
Comment:Lectures with workshops, supervised exercises in groups
Workload activity:Self study
Duration:105 Hour(s)
Comment:Work with compulsory literature, exercises, and lecture preparation
Workload activity:Submission(s)
Duration:50 Hour(s)
Comment:
Workload activity:Examination
Duration:3 Hour(s)
Comment:
Sum workload: 
200

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.