Professional Documents
Culture Documents
Group 1 Report
Group 1 Report
TO VALUATION
METHODS
(GROUP 1)
FOUNDATIONS OF VALUE AND
FUNDAMENTAL PRINCIPLES OF
VALUE CREATIONS
2
Foundation of Value
O Irreversibility
O Entropy
O Fitness
Fundamental Principles of
Value Creation
O The Net Assets Method represents the value of the business with
reference to the asset base of the entity and the attached liabilities on
the valuation date. The Net Assets Value can be calculated using one of
the following approaches
1. At Book Value
This method would only give the historical cost of the assets and may
not be indicative of the true worth of the assets in terms of income
generating potential
2. At Intrinsic Value
The intrinsic value of assets is worked out by considering current
market/replacement value of the assets.
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