METHODS OF LEVELING THE LIMITATIONS OF THE FINANCIAL PLANNING SYSTEM OF NON-PUBLIC COMPANIES WHEN FORECASTING THE VALUE OF A BUSINESS

Author(s): Nazarenko O.V., Malkov S.V

Rubric: Economy

DOI: 10.21777/2587-554X-2023-2-33-39

Release: 2023-2 (45)

Pages: 33-39

Keywords: financial planning, business value, asset impairment, non-public companies

Annotation: The article defines the financial planning system of a corporation. The necessity of forecasting the cost of business by the financial planning system of Russian corporations is analyzed, including due to the application of international financial reporting standards as part of the convergence of Russian accounting standards with international financial reporting standards. It is revealed that international financial reporting standards define the discounted cash flow method as the main one for determining the value of a corporation. Within the framework of the weighted average cost of capital method, the existing methods of assessing the cost of equity of corporations are considered and their applicability by non-public companies is analyzed. A modified method of assessing capital assets is proposed for organizations whose shares are not traded on the stock market. This modified method of capital asset valuation is a combination of the discounted dividend flow method and the W. Sharp capital asset valuation model, while having a lower level of subjectivity than the cumulative construction method.

Bibliography: Nazarenko O.V., Malkov S.V METHODS OF LEVELING THE LIMITATIONS OF THE FINANCIAL PLANNING SYSTEM OF NON-PUBLIC COMPANIES WHEN FORECASTING THE VALUE OF A BUSINESS // Economics and Management. – 2023. – № 2 (45). – С. 33-39. doi: 10.21777/2587-554X-2023-2-33-39