Page 335 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
exchange.

Preference Shares Valuation
- The value of preference shares is estimated based on yield on similar companies' shares.
- Consideration for factors like restriction on transferability and average rate of earnings is essential.

Net Worth Basis Features
- Each asset should be revalued considering its utility to the business.
- Assets may have values more or less than their book values on revaluation.
- The assets should be revalued at their replacement cost.
- Value of goodwill is dependent on capacity to earn super-profit and duration it's expected.
- Goodwill value estimation requires analyzing the trend of economic, social, and political forces.

Yield Basis Features
- The value of shares on yield basis is determined by the present value of future dividends.
- Determination of future profits and their distribution as dividends is required.
- Rate for capitalising dividends is decided based on risks and past company history.
- The investigating accountant should consider factors reflected in share prices of similar businesses on the
Stock Exchange.
- In any valuation, if share control is also to pass, a separate value should be ascertained for control.

(CNO—INTG.120) INVESTIGATION ON BEHALF OF THE BANK FOR ADVANCES

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