Fallen angels are issuers whose bonds have been downgraded from investment-grade to high-yield. This paper looks into their characteristics, historical performance and differences between the current credit cycle and earlier regimes.
This report qualifies for 0.5 CE credit under the guidelines of the CFA Institute Continuing Education Program.
We encourage CFA Institute members to log in to the CE tracking tool to self-document these credits.
IFRS15 requires companies that enter into long-term contracts with customers, such as telecoms or membership services, to report revenues from such contracts separately from other revenues. Effective since 1 January 2018, the regulation requires a change in reporting practices.
ACCA Hong Kong conducted a member survey in January 2018 to seek the views of professional accountants in Hong Kong on the GBA initiative.
Through this careful study and consultation, ACCA Hong Kong lays out a series of recommendations in the report for consideration:
The rise of platforms, the changing nature of work, the means by which services are provided and the digitisation of manufacturing are just some of the shifts that technology is making possible.
But new business models are not just about technology. Around the world new markets are emerging and old ones are evolving. Unquestionable economic certainties are being challenged. What were intangible environmental impacts are now daily healthcare problems for millions. What people value is changing.
Factors that have elevated the business model include:
The’ Full Stack’ is an end to end framework to help understanding and assessment of the value creation potential of new business models.
It is made up of two sections:
1. The back-end comprises five layers. Taken together they combine to create the foundations for future business models.
2. The front-end comprises five layers. It brings together key socio-economic horizons faced by businesses today.
Together the two ends provide a tool for exploring the potentials of business models and the context in which they will operate.
Swipe to view table
Jollibee Foods Corp. gets a BUY recommendation based on the analysis of financial statements, information on quick –service market, well-known stock analysts forecasts, and significant events for the period 2006 to 2016 (up to 30 September 2016).
The B&R research project was conceived in August 2016. It explores the opportunities and challenges for B&R countries (including China) in politics, economics, society and culture through desk research, roundtable conferences and workshops.
This approach considers local experiences and international vision, historical achievements and future development.
The report is divided into three areas:
Title: A Resolution to the Problem of Multiple IRR: A Modified Capital Amortization Schedule (MCAS) Method for Non-Normal Cash flow (NNCF) to Obtain a Unique IRR
The problem of multiple IRR remained unresolved for almost a century. This problem is associated only with some of the non-normal net cash flow (NNCF) that wrongly includes reinvestment income as income or benefit stream. The reinvestment income, which is not a benefit from the investment or project under analysis, causes the multiple IRR problem. This is often misinterpreted as problem of IRR but its neither a problem with IRR nor NPV. It is a problem associated with some NNCF data and the failure to update the discounted cash flow (DCF) or capital amortization schedule (CAS) methods to handle such problem.
Using NNCF data, analyses are conducted with special emphasis on topics such as:
a. A modified CAS (MCAS) method that eliminates multiple IRR associated with NNCF data;
b. Multiple IRR problem and the Descartes rule of sign and Norstrom’s criteria;
c. A NNCF data with a unique IRR under DCF / CAS methods vs IRR by MCAS method;
d. Resolving the problem of multiple IRR by MCAS Method Versus MIRR; and
e. A critical review of the GIRR and AIRR Methods to Estimate NNCF.
The salient findings of the present analysis are:
a. The MCAS method, presented in this paper, identifies and eliminates the reinvestment income associated with NNCF investments (with positive opening balance in one or more years in the CAS) from the benefit stream;
b. This new method overcomes the multiple IRR problem and leads to a unique and real IRR; The effectiveness of MCAS to handle the NNCF data is illustrated with numerical analysis;
c. The assumption of reinvestment at IRR or at hurdle rate in NPV are false assertions in the cases of normal NCF and some of the NNCFs. However, such reinvestment is evident only with NNCFs with positive opening balance in one or more years under the CAS.
d. The reinvestment income under the benefit stream causes multiple IRRs and multiple NPVs too. As NPV is a static point estimate (at hurdle rate) the multiple NPVs are not exposed. Without eliminating the reinvestment income, none of the criterions viz. NPV, IRR or MIRR, is useful as a decision criterion. Neither NPV or MIRR is a preferred criterion, under such circumstances, as recommended in some published works.
e. The MCAS method is appropriate for both normal NCF and NNCF as illustrated in this paper. CAS or DCF method is appropriate only for normal NCF investments.
f. Even when there is no multiple IRRs with some NNCFs under DCF/CAS method, the MCAS method estimated IRR or NPV, without reinvestment income, are different from that of the DCF/CAS estimated IRR and NPV. For a consistent estimate of IRR and NPV, the MCAS method is most appropriate both for NCF and NNCF investments.
g. The generalized IRR (GIRR) and the Average IRR (AIRR) are also not appropriate estimates for NNCF and they are not NCF consistent as discussed in this paper. The problem of multiple IRR associated with the popular cases of NCF investments used in GIRR and AIRR, are also resolved now.
In conclusion, the MCAS method resolves the problem of multiple IRR and leads to a unique IRR that is real and NCF-consistent. Neither the NPV nor the MIRR could resolve the problem of multiple IRR.
The topics have been selected on the basis of ACCA’s sustainability research to date and although for these purposes have been separated out, we acknowledge that these topics are interrelated. As the scope of ACCA’s research broadens over time, it is expected that additional topics will be added to this list.
This paper serves as a reference for our key stakeholders, as well as a means of summarising the outcomes and conclusions of ACCA’s research activities.
Valuation Insights is a quarterly e-newsletter that provides you with the latest news from Duff & Phelps and the trends and changes in valuation and accounting that could affect your business transactions in Asia.
In this edition, our top stories cover the Financial Accounting Standards Board issuing an Accounting Standards Update, robust fair value measurement, the International Valuation Standards Council releasing the 2017 edition of its International Valuation Standards, and a recent Duff & Phelps study about fairness opinions.
We will also look at important Duff & Phelps reports and articles, including a recorded forum presentation by Professor Damodaran and the Duff & Phelps Global Regulatory Outlook 2017.