---
_id: '5333'
abstract:
- lang: eng
text: 'When taxes on capital or wealth are levied, in most countries companies have
to be assessed in terms of their market value (MV). Estimating the MV of private
companies for tax purposes is a challenging task for tax authorities as MVs are
not available. In this study, I empirically analyse to what extent an accounting-based
tax valuation method for private companies, a simplified residual income model,
succeeds in matching the MV. I refer to the mandatory Standardised Combination
Model that is a special case of methods commonly used in several countries. In
the absence of market prices for private companies, I use a sample of small German
public companies as a proxy. I validate this approach using a sensitivity analysis
that involves matching the sample of public companies with that of private companies.
The results imply that the mandatory Standardised Combination Model leads to a
severe unequal treatment not only between public and private companies but also
among private companies across and within industries. Furthermore, I simulate
the effects of variation in the key parameters and highlight their impact on the
approximation quality of the Standardised Combination Method. The findings are
relevant to tax reform discussions as well as to tax policy-makers and practitioners
in many countries. '
author:
- first_name: Jens
full_name: Müller, Jens
id: '1245'
last_name: Müller
citation:
ama: Müller J. The Challenge of Assessing the Market Value of Private Companies
Using a Standardized Combination Method for Tax Purposes – Lessons to Be Learned
from Past Experience. Vol Volume 23, Number 1. Routledge, part of the Taylor
& Francis Group; 2014:117-141(25). doi:10.1080/09638180.2012.746528
apa: Müller, J. (2014). The Challenge of Assessing the Market Value of Private
Companies Using a Standardized Combination Method for Tax Purposes – Lessons to
be Learned from Past Experience (Vol. Volume 23, Number 1, pp. 117-141(25)).
Routledge, part of the Taylor & Francis Group. https://doi.org/10.1080/09638180.2012.746528
bibtex: '@book{Müller_2014, series={European Accounting Review}, title={The Challenge
of Assessing the Market Value of Private Companies Using a Standardized Combination
Method for Tax Purposes – Lessons to be Learned from Past Experience}, volume={Volume
23, Number 1}, DOI={10.1080/09638180.2012.746528},
publisher={Routledge, part of the Taylor & Francis Group}, author={Müller,
Jens}, year={2014}, pages={117-141(25)}, collection={European Accounting Review}
}'
chicago: Müller, Jens. The Challenge of Assessing the Market Value of Private
Companies Using a Standardized Combination Method for Tax Purposes – Lessons to
Be Learned from Past Experience. Vol. Volume 23, Number 1. European Accounting
Review. Routledge, part of the Taylor & Francis Group, 2014. https://doi.org/10.1080/09638180.2012.746528.
ieee: J. Müller, The Challenge of Assessing the Market Value of Private Companies
Using a Standardized Combination Method for Tax Purposes – Lessons to be Learned
from Past Experience, vol. Volume 23, Number 1. Routledge, part of the Taylor
& Francis Group, 2014, pp. 117-141(25).
mla: Müller, Jens. The Challenge of Assessing the Market Value of Private Companies
Using a Standardized Combination Method for Tax Purposes – Lessons to Be Learned
from Past Experience. Vol. Volume 23, Number 1, Routledge, part of the Taylor
& Francis Group, 2014, pp. 117-141(25), doi:10.1080/09638180.2012.746528.
short: J. Müller, The Challenge of Assessing the Market Value of Private Companies
Using a Standardized Combination Method for Tax Purposes – Lessons to Be Learned
from Past Experience, Routledge, part of the Taylor & Francis Group, 2014.
date_created: 2018-11-05T09:02:58Z
date_updated: 2022-01-06T07:01:50Z
department:
- _id: '186'
- _id: '189'
doi: 10.1080/09638180.2012.746528
jel:
- H2
- M41
language:
- iso: eng
page: 117-141(25)
publisher: Routledge, part of the Taylor & Francis Group
series_title: European Accounting Review
status: public
title: The Challenge of Assessing the Market Value of Private Companies Using a Standardized
Combination Method for Tax Purposes – Lessons to be Learned from Past Experience
type: working_paper
user_id: '48187'
volume: Volume 23, Number 1
year: '2014'
...