The valuation of in-situ plant and machinery

The use of conventional cost-based valuation techniques can significantly understate in-situ plant and machinery values in fixed asset intensive businesses, especially in mining related assets. There are also important potential flow-on consequences to other valuations where a top-down valuation met...

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Bibliographic Details
Published inJASSA no. 4; p. 31
Main Author Lonergan, Wayne
Format Journal Article
LanguageEnglish
Published Sydney Finsia - Financial Services Institute of Australasia 01.12.2009
Subjects
Capital markets
Costs
Fair market value
Financial reporting
Fixed assets
Machinery
Mining
Present value
Sales
Situs
State court decisions
Studies
Tax basis
Valuation
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Summary:The use of conventional cost-based valuation techniques can significantly understate in-situ plant and machinery values in fixed asset intensive businesses, especially in mining related assets. There are also important potential flow-on consequences to other valuations where a top-down valuation methodology is used. Before undertaking fixed asset valuations, the appropriateness or otherwise of the conceptual framework from which the numbers are derived and their context should be carefully considered. [PUBLICATION ABSTRACT]