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VALUATION

Discussing the historical background and changes resulting from SNA 2008 regarding the valuation of equity, this session proposes a new survey on the valuation of unquoted shares. Delegates are invited to provide feedback and suggest amendments.

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VALUATION

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  1. VALUATION OF Working Party on Financial Statistics 2– 4 November 2009 – Item 3.a. by Michèle Chavoix-Mannato (STD) QUOTED SHARES

  2. Valuation of QuotedShares Main objectives • To remind Delegates and experts of the work already carried out on the measurement of equity • To inform them on changes resulting from SNA 2008 • To present a new survey on the valuation of unquoted shares Delegates are invited to discuss this survey and propose amendments

  3. Valuation of QuotedShares Historical background • In SNA 1993: • No breakdown of ‘Shares and otherequity’ • No reference to the valuation of shares • Since 2002 • Eurostat WGUS: approval of an addendum Issue N°9 to the Manual on Sources and Methods(April 2004) • OECD Workshop on UnquotedShares: collection of methodological information (limitednumber of countries) and volunteers to test the Europeanmethod(October 2004) • OECD Task Force on the Valuation and Measurement of Equity(TFVME): review of practicalapproaches in OECD countries; recommendationsrelating to valuation & further breakdown; and transmission of preliminary conclusions to the AEG (April 2005)

  4. Valuation of QuotedShares Historical background(cont.) • Advisory Expert Group on National Accounts: commitment to the Task Force of documentingreasons for changes and proposals(July 2005) • OECD TFVME: proposal for two possible approaches, eitherMarket capitalisation method, or Othermethods (NAV, PV, OFBV..) and agreement for flexibility; support to split AF5 betweenCorporateshares (AF51) and Investmentfundunits (AF52) (October 2005) • Advisory Expert Group on National Accounts:agreement on the principle of flexibility in the treatment of unquotedshares; report of the decision for a further breakdown of AF5 (February 2006)

  5. Valuation of QuotedShares White-cover version of SNA 2008 Approved by the Bureau of the UNSC in August 2008: • Chapter 3: general remark on issues regarding the non-availability of market prices and the substitutive methods • Chapter 11: new appellation for F5/AF5 ‘Equity and Investment funds shares’ and breakdown between Equity (F51/AF51) and Invesment funds shares (F52/AF52), and further split of F51/AF51 • Chapter 13: enumeration and definition of the various methods of valuation; invitation to compilers to be transparent and clearly state the method they use.

  6. Valuation of QuotedShares FOLLOW-UP • Need for updated information on national practices for the valuation of unquoted shares • Need for greater country coverage • Proposal: to launch a survey among all OECD countries to know which method is currently applied (or will be applied)

  7. Valuation of QuotedShares Content of the new survey to belaunchedafter the meeting, if approved • General questions regarding • the current situation in financialaccounts and financial balance sheets • the consistencywith BOP and IIP statistics • Specific questions on the sources and methods of Equity(F51/AF51 and itsthree components) • Additional questions regardingInvestmentfundsshares(F52/AF52)

  8. Valuation of QuotedShares Specific questions on the sources and methods of Equity(F51/AF51 and itsthree components) • Main sources and supplementary information used forquotedshares, unquotedsharesand otherequity • For each source, detailed information of the frequency, timeliness, coverage, valuation …. • Methodused for quotedshares • Marketprices or othervaluation • Methodused to compile unquotedshares • Methodrecommended by Eurostat • Methodproposed in the SNA 2008

  9. Valuation of QuotedShares Additional questions regardingInvestmentfundsshares(F52/AF52) • Availability of components of Investmentfundsshares • according to the composition of theirassets: • Money marketfunds • Other types of funds • betweenlisted and unlistedshares • Main sources used • Valuation of investmentfundsshares

  10. Valuation of QuotedShares Conclusion • Delegates are invited to endorse the OECD proposal to launch a new survey on valuation of unquoted shares • Delegates are invited to comment the content of the survey and to amend it if necessary

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