An assessment of the relevance of present value disclosures in the extractive industry

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dc.contributor.advisor Erica du Toit en_US
dc.contributor.author Scholtz, Pieter Devilliers
dc.date.accessioned 2012-06-06T08:26:28Z
dc.date.available 2012-06-06T08:26:28Z
dc.date.issued 2012-06-06
dc.date.submitted 2012-03-22
dc.identifier.uri http://hdl.handle.net/10210/4950
dc.description M.Comm. en_US
dc.description.abstract A discussion paper was issued by the IASB in April 2010 wherein it is proposed that discounted cash flow measurement disclosures should be made by entities that operate in extractive industries. These disclosures are similar to those made by oil and gas companies that report under US GAAP. A review of the South African code for the reporting of mineral asset valuation (SAMVAL) and fair value principles suggest that standardised discounted cash flow disclosures by entities in the extractive entities will not always be relevant to users of financial statements. This study includes an assessment of the value relevance of discounted cash flow measurements based on its correlation with share prices. The regression results of a price change study suggest that changes in the standardised discounted cash flow measurements are value relevant because they are significant in explaining changes in share prices. Previous research suggested that in periods of relative oil price stability, reserve based measures are relatively non-informative. Data used in this study covered the period 2004 – 2008, a period that was characterised by oil price instability as a result of the global economic recession. On the other hand, the regression results of a price level study indicate that standardised discounted cash flow measurements did not make significant contributions to explaining changes in the market value of equity and are therefore not value relevant. en_US
dc.language.iso en en_US
dc.subject Cash flow accounting en_US
dc.subject Extractive industries en_US
dc.subject Mineral asset valuation en_US
dc.title An assessment of the relevance of present value disclosures in the extractive industry en_US
dc.type Mini-Dissertation en_US

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