韩国配色很好的ppt模板.ppt

《韩国配色很好的ppt模板.ppt》由会员分享，可在线阅读，更多相关《韩国配色很好的ppt模板.ppt（14页珍藏版）》请在装配图网上搜索。

1、Trends in FAS 123R Valuation: Market Based & Models,Best Practices Perspective,David Roberts President & CEO Equity Methods,Fair Value and the Fair Value Hierarchy,Fair value has been the topic of considerable research, debate, and regulatory attentiona unified framework is rapidly emerging,Derived

2、from FAS 157, “Fair Value Measurements”,Markets versus Models,Share-based compensation instruments are not tradable Why observable market prices have historically not existed for employee options Models became the de facto standard in measuring the fair value of employee options A model estimates fa

3、ir value by modeling how a market would price the employee option if it could price the employee option (i.e., if it were tradable),Market-based Valuation: Finally?,Search for a market-based valuation methodology is not a new phenomenon, and even traces back to FAS 123R and prior standards, in which

4、 it is heralded as the preferred approach,If an observable market price is not available for a share option or similar instrument with the same or similar terms and conditions, an entity shall estimate the fair value of that instrument using a valuation technique or model that meets the requirements

5、 in paragraph A8 and takes into account (FAS 123R, Paragraph A18),A quoted market price, if one is available, is the best measure of the fair value of an asset, liability, or equity instrument. In its deliberations leading to this Statement, the Board was not able to identify currently available quo

6、ted market prices or negotiated prices for employee stock options that would qualify as a price at which a willing buyer and a willing seller would exchange cash for an option. (FAS 123, Paragraph 161),Market-based Valuation: Chronology of Events,Making Decisions: Is Market-based Valuation Right for

7、 You?,“When we deal in generalities we shall never succeed. When we deal in specifics we shall rarely have a failure.” -Thomas Monson,Issue 1: Lower Valuation,Undoubtedly, a central question companies will ask is how market-based valuations are likely to differ from existing model-based approaches A

8、nswers to these questions must be grounded in thoughtful economic analysis Making quick assumptions as to the potential results of a market-based valuation is a recipe for disaster,“Youve got to ask yourself one question: Do I feel lucky?” - Clint Eastwood,Market-based values may not always be lower

9、 than model-based values This is a firm-specific question companies should investigate based upon their own unique circumstances A more meaningful assessment will examine two general questions: First, is there some requirement in FAS 123R that my company is rigidly required to follow that may deviat

10、e from how the market would otherwise process this information in the context of my company Second, is there some difference between how the model-driven fair value developed for my company may differ from how the capital markets would price the same option An example of each is provided,Issue 1: Lo

11、wer Valuation,Example 1: Term-matching Principle,FAS 123R states the core volatility objective is to estimate volatility as a market participant would When using historical volatility, a general approach presented in FAS 123R is the term-matching principle Unfortunately, in some cases this creates t

12、ension with the core objective,Consider the following example:,Measurement Details: Date: Summer 2007 Expected term: 6.5 years 6.5-year historical volatility: 46% 4.5-year historical volatility: 32%,Example 2: Evolutions in Exercise Patterns,While both model- and market-based valuations will be hist

13、orically contingent, markets have more flexibility and resources to formulate reliable expectations as to how/when patterns will emerge A market encompasses a plurality of expectations, and the clearing price represents a “consensus” expectation The manner in which models are utilized under FAS 123R

14、 gives precedence to singular expectations A good example of this concerns exercise patterns, whereby the market will be developing expectations as to how exercise strategies will evolve as the company also matures and grows,Issue 2: Liability vs Equity Treatment,Measured (valued) once at issuance,M

15、easured (valued) once at issuance, but then remeasured each period thereafter,In their current form, market-based valuation approaches will result in the issuance of securities that create a contingent claim on the assets (cash) or equity of the issuing company, most likely the equity Balance sheet

16、classification as either equity or a long-term liability This classification will have substantial implications on the design of the market instrument Some considerations: How will this classification decision be made? FAS 150? Future guidance? If classified as liabilities, will periodic remeasureme

17、nt result in a forced retreat to valuation models? Why is the company issuing the securities? Are third parties capable of issuing them, instead? Issue may even be resolved by the NASPP date?,Issue 3: Trading Volume,Markets exist everywhere Market-based valuation requires a competitive market, which

18、 can be measured by factors such as: Number of buyers and sellers Number of instruments demanded relative to the number of instruments offered Technology issues Bidders perceptions regarding holding, hedging, and trading costs of instrument,Issue 3: Trading Volume,Insufficient competition will precl

19、ude the market-clearing price from being usable for FAS 123R fair value estimation purposesthis would be bad news for issuing companies On the front end, companies should evaluate very carefully the likelihood of achieving sufficient market competition A few ways of assessing the potential outcome i

20、nclude: Experience in other derivatives markets (quoted options, convertible debt) Richness of employee option data made available (to induce market participation) Track record of market maker / auction platform Experimental economics,Where is your Company?,The next 1 2 years will be pivotal as companies begin to assess the fit of a market-based valuation scheme given their unique circumstances,