One-Step Valuation Method (Technical)
Notation
BV = |
Book value |
OBV = |
Old book value |
NBV = |
New book value |
AV = |
Acquisition value |
KDV = |
Key date value |
LC = |
Local currency |
PC = |
Position currency |
SP = |
Security price |
ER = |
Exchange rate |
OER = |
Old exchange rate = |
NER = |
New exchange rate |
Comparison = |
Selection of new book value according to write-up/write-down rules |
Valuation process:
® NBV (LC)
® NSP
® NER
NBV (PC) (=NBV(LC) x NER)
- OBV (PC)
= SEC write-down (PC)
SEC write-down (PC) x OER = SEC write-down (LC)
NBV
- OBV
= total write-down (LC)
Total write-down (LC)
- SEC write-down in LC
= write-down in the foreign currency
