top of page
Search

Nominal amount in valuation

  • Writer: Thomas Tsang
    Thomas Tsang
  • Dec 12, 2020
  • 1 min read

Nominal amount means amount without taking into account of inflation in forecast. Then, in discount rate also not add the inflation rate.


Then will be consistent in both forecast and discount.


If we consider real cash flow, then the inflation is add in. Say 7% inflation rate, the discount rate should add 7% to reflect it. The result of NPV will be the same in both nominal value and real value.




 
 
 

Recent Posts

See All
Audit thinking logic

What are we going to audit - revenue, trade receivables, unquoted equity investments, trade payables, etc What audit procedures (nature, timing) to be performed to ascertain each of the assertions Wha

 
 
 
Audit schedule provided by client in audit

Before we place reliance on audit schedule provided by client in an audit engagement, we are required to ensure the completeness and accuracy of the audit schedule. In order to address the issue, we n

 
 
 
Enterprise value

In business valuation, enterprise value is the value of the business. It includes any intangible assets not booked such as goodwill,...

 
 
 

Comments

bottom of page