| IV. Asset Leasing. An option for decisions, related to assets, is leasing versus buying the asset. This section identifies websites that have information on: lease accounting; advantages and reasons for leasing; and leasing internationally. One website provides a lease versus buy calculator. This site, www.sec.gov/info/accountants/staffletters/cpcaf020705.htm, provides several Securities and Exchange Commission staff accountants’ views on acceptable principles and standards for accounting for leases. Financial Computer Systems, Inc. maintains this site, www.ez13.com/index.htm, from which you can link to: US and Canadian accounting guidance on leases; a glossary of lease terms; and reasons for leasing. This link, www.toolkit.cch.com/text/p04_5150.asp, takes you to a site, in the CCH’s Business Owner’s Toolkit, that discusses the advantages of leasing assets versus purchasing them. This link, www.leasingideas.com, takes you to a site, maintained by Leasing Ideas, which provides: reasons to lease; answers to frequently asked questions about leasing; leasing term definitions; and other information on leasing. The Equipment Leasing Association maintains a site, www.chooseleasing.com, which provides information to help decision-making related to leasing. Questions to ask before signing a lease, a glossary of terms, and case studies are available. S.B. Associates, Inc. maintains this site, www.lease-vs-buy.com, which has a lease versus buy calculator. Several input variables can be used, leading to a net present value (NPV) of leasing a piece of equipment versus the NPV of buying that piece of equipment. Click on “Calculator”, along the left, to get to the input screen. This link, www.india-financing.com, take you to a site, maintained by the Indian Vinod Kothari, that provides leasing-related accounting, tax, legal, and markets information for several countries. This Japanese site, www.leasing.or.jp/english/industry/top.html, provides links to many aspects of leasing in Japan. Japanese leasing statistics and definitions, and legal, taxation, and accounting information are available. V. Asset Valuation. The websites in this section were chosen because of the potential use of the information at the websites to accountants who need to determine, or evaluate, an asset value. Websites are included that have databases of sales prices for equipment, property, and businesses. Websites are included that provide information on methods used in valuing cash generating assets, such as whole businesses. Because the scope of asset valuation is large, this section can only expect to be very limited in what websites are identified related to asset valuation. But, hopefully, the websites that are identified can serve as a starting point in finding information in this area. This site, www.ivsc.org, maintained by the International Valuation Standards Committee, provides standards for valuing assets. Standards are provided for valuing plant and equipment, trading property, and extractive industries. Issues in global valuation are presented. Links to valuation trade associations are available. This link, www.willyancey.com/sampling-valuation.html, takes you to a site, maintained by Will Yancey, which has links to a few sites with sales price databases for various types of property, such as land and equipment. Some of the sales price databases require a fee to access. This site, www.bvmarketdata.com, has extensive databases on sales prices for private and public companies, as well as sales prices for other assets. Full access to the databases requires subscription fees. Visitors can gain free partial access to the databases, and pay on a per asset basis for full access to the data. Some other free information, including a frequently asked questions page, may be of some, but limited value. The site is maintained by Business Valuation Resources, LLC. This link, www.toolkit.cch.com/advice/03-168askalice.asp, takes you to a site, maintained by CCH, Inc, which presents information on the following principles and methods for a valuing a business: business assets; historical earnings; a combination of assets and earnings; the market for similar businesses; and future earnings for discounted cash flows. Professor Damodaran at New York University’s Stern Business School maintains large amounts of information and data on his website, www.pages.stern.nyu.edu/~adamodar. At his front page, click on “Valuation” and you will come to information and data on several methods of valuing assets. Many readings provide useful information related to valuation. This link, www.business.com/directory/financial_services/investment_banking_and_brokerage/mergers_and_acquisitions_manda/business_valuation_techniques, takes you to a site, provided by business.com, that has several links to websites dealing with various valuation techniques, such as discounted cash flows, and other information related to business valuation. Al Rappaport and Michael Mauboussin maintain this site, www.expectationsinvesting.com/tutorial11.shtml, which provides an overview on computing the value of a company’s real options and their effect on the present value of a future project. VI. Equity. Websites identified in this section have information related to equity. Information can be found at these sites that: compare the use of equity versus debt for the capital needs of a company; explain the cost of capital; and provide guidance on raising equity. CCH’s Business Owner’s Toolkit maintains this site, www.toolkit.cch.com/text/P10_2000.asp, at which is an explanation on using equity versus using debt to finance the cash needs of the organization. An explanation of the debt to equity ratio and what the value might mean is given. At www.bizstats.com/corpdecurrent.htm, maintained by BizStats.com, you will find average debt to equity ratios for dozens of business categories. This link, www.expectationsinvesting.com/tutorial8.shtml, takes you to a site, created by Al Rappaport and Michael Mauboussin, that goes through the steps in computing a company’s cost of capital. A spreadsheet is used in assisting in the computation. Definitions and explanations are provided. Professor Damodaran at New York University’s Stern Business School maintains large amounts of information and data on his website, www.pages.stern.nyu.edu/~adamodar. At the front page, click “Updated Data”. On the “Data Page”, go down to “Discount Rate Estimation” and click on “Costs of Capital by Industry Sector”. This site, www.sec.gov/info/smallbus.shtml, is the Securities and Exchange Commission page designed to help small businesses and other non-public companies with information on going public. VII. Conclusions. All the websites identified in this article can also be linked to from the Management Accounting Information Center (MAIC)’s front page, by clicking “Fixed and intangible assets, equity, and asset valuation”, found along the right side of the front page. Other topic areas along the right side of the front page can also lead to websites that have information that might help the accountant looking for fixed asset and equity-related information. “Standards, principles, and concepts used in accounting and financial reporting” will lead to websites with principles and concepts in all areas of accounting, including fixed asset and equity accounting. “Company financial results, SEC reporting, and other company data” will lead to sites that have a lot of information on company financial reporting, including reporting on the company’s fixed assets and equity. “Taxation – federal, state, and international income, sales, and other taxes “ will lead to sites with information on the tax accounting aspects of fixed assets and equity. Click on “Interactive spreadsheets and calculators and spreadsheet and database use”, and then "Calculators”, and then “Valuations”, and you will find links to websites where business valuation calculators are available. This article has focused on topics found in two areas of the balance sheet – fixed assets and equity. The information at the websites identified in the article, in addition to being of possible use to accountants, might also be useful to company owners, and anyone involved in making financial and asset-related decisions. Please click here if you would like to send an email comment about this article or suggest a topic for another article Click here to return to the Management Accounting Information Center's homepage |
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