Asia-Pacific Journal of Business (아태비즈니스연구)

KNU The Institute of Management & Economy Research (강원대학교 경영경제연구소)
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Effects of the Adjusted Beta Estimation Method on the Valuation of the Impairment Loss on Assets

조정베타 추정방식이 자산 손상차손 가치평가에 미치는 영향

  • Chang, Uk (Department of Business Administration, Duksung Women's University) ;
  • Kim, Yie-Bae (Department of Accounting, Duksung Women's University)
  • 장욱 (덕성여자대학교 경영학과) ;
  • 김이배 (덕성여자대학교 회계학과)
  • Received : 2019.11.30
  • Accepted : 2019.12.24
  • Published : 2019.12.30
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Abstract

We point out the limitations of Bloomberg Adjustment beta, shows that long-term beta does not converge with 1 and suggests an alternative to using proxy beta as beta's long-term forecast. We analyze whether the beta produced in the manner proposed by Bloomberg beta or proxy beta meets the purpose of calculating capital costs, for example, for the evaluation of corporate value. In particular, We apply in impairment valuations of assets and some analysis of how it affects. The proposal of the article applied in cases of analysis results are as follows : First, unlike the Bloomberg approach, long-term beta does not converge with market beta and therefore is not suitable as market forecast by beta. Second, estimating the suggested proxy beta as beta's predictive value resulted in Bloomberg beta and other adjustment Beta in the case categories, and the gap was large. Third, applying proxy beta results in a more appropriate valuation of the impairment loss on assets.

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References

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