14.14.2 Differential Accounting Con

14.14.2 Differential Accounting Conventions
Even when the financial data for an industry and a firm are timely and reliable, it is necessary
to recognize that the accounting rules and practices differ dramatically around the world. Not
only are the financial statements very different in general presentation, but the accounting
practices differ related to sales and expense recognition. The fact is, identical transactions in
different countries can generate significant differences in income and cash flow. As a result,
stocks in different countries will have very different P/E and P/CF ratios, not because investors
differ in valuation but because the accounting numbers used are not the same. Because of
these accounting problems, many investors advocate using the price-to-sales ratio in valuations
across countries since sales revenue is the least contaminated accounting figure. The good
news is the movement toward using global accounting standards. For an overview of this transition,
see SEC Staff Paper (2011) and SEC Release (2010).
14.14.3 Currency Differences (Exchange Rate Risk)
A significant factor that must be considered by global investors is currency risk caused by
changes in exchange rates among countries. While these rate changes can work for or against
you, the point is that it creates a major uncertainty that must be considered when analyzing a
company and valuing its stock.
14.14.4 Political (Country) Risk
In the United States, we have been blessed with a stable political and economic environment.
Unfortunately, this stability was undermined by the political gridlock related to the debt ceiling
debate during the summer of 2011 that eventually led to the downgrade of our Treasury bond
rating in August 2011. Even with this “political problem” that we envision will be temporary,
most observers recognize that most other countries have greater political/country risk than the
U.S., and in some cases (e.g., Russia, Indonesia, Thailand, and Iran), it can be substantial.
Therefore, you must acknowledge this different risk factor and estimate its effect on the cost
of equity for firms in other countries.
14.14.5 Transaction Costs and Liquidity
Higher transaction costs result from less-liquid markets—where it takes longer to trade and
there is more price volatility connected to a trade—or from a trade that costs more (e.g.,
higher commissions). Again, these costs vary dramatically among countries. The good news is
the creation and consolidation of markets, as discussed in Chapter 4.
14.14.6 Valuation Differences
These individual country differences combine to cause a clear differential in the stock valuation
for an international stock. Specifically, the earnings or cash flow numbers will differ and
the required rate of return (the discount rate) for a non-U.S. stock will differ substantially
because there are additional risks noted, such as exchange rate risk, political risk, and higher
liquidity costs.
14.14.7 Summary
In summary, the good news when investing globally is that the valuation process is the same
around the world, and the investment decision in terms of the ultimate comparison of intrinsic
value and price is similar. The negative news is that the valuation of international securities
requires attention to several additional factors that must be considered when valuing an international
stock. Therefore, everything you have learned about analysis and valuation is relevant,
but it must be applied differently (i.e., the inputs differ), depending on the country.

Hasil (Bahasa Indonesia) 1:

14.14.2 diferensial akuntansi ConventionsBahkan ketika data keuangan untuk industri dan perusahaan tepat waktu dan dapat diandalkan, hal ini diperlukanuntuk mengenali bahwa aturan-aturan akuntansi dan praktek berbeda secara dramatis di seluruh dunia. Tidakhanya Apakah laporan keuangan sangat berbeda dalam presentasi umum, tapi akuntansipraktek berbeda berkaitan dengan penjualan dan biaya pengakuan. Faktanya adalah, identik transaksi dinegara yang berbeda dapat menghasilkan perbedaan yang signifikan dalam pendapatan dan arus kas. Sebagai akibatnya,saham di negara yang berbeda akan memiliki rasio P/E dan P/CF yang sangat berbeda, bukan karena investorberbeda dalam penilaian tetapi karena nomor akuntansi yang digunakan tidak sama. Karenamasalah akuntansi ini, banyak investor menganjurkan menggunakan rasio harga-untuk-penjualan dalam penilaiandi seluruh negara sejak pendapatan penjualan adalah angka akuntansi yang paling terkontaminasi. Yang baikBerita adalah pergerakan menuju menggunakan standar akuntansi global. Untuk gambaran dari transisi ini,Lihat SEC staf kertas (2011) dan rilis SEC (2010).14.14.3 mata uang perbedaan (risiko nilai tukar)Faktor penting yang harus diperhatikan oleh para investor global yang disebabkan oleh risiko mata uangperubahan nilai antara negara-negara tukar. Sementara perubahan tingkat ini dapat bekerja untuk atau melawanAnda, intinya adalah bahwa hal itu menciptakan ketidakpastian besar yang harus dipertimbangkan ketika menganalisisperusahaan dan menilai sahamnya.14.14.4 risiko politik (negara)In the United States, we have been blessed with a stable political and economic environment.Unfortunately, this stability was undermined by the political gridlock related to the debt ceilingdebate during the summer of 2011 that eventually led to the downgrade of our Treasury bondrating in August 2011. Even with this “political problem” that we envision will be temporary,most observers recognize that most other countries have greater political/country risk than theU.S., and in some cases (e.g., Russia, Indonesia, Thailand, and Iran), it can be substantial.Therefore, you must acknowledge this different risk factor and estimate its effect on the costof equity for firms in other countries.14.14.5 Transaction Costs and LiquidityHigher transaction costs result from less-liquid markets—where it takes longer to trade andthere is more price volatility connected to a trade—or from a trade that costs more (e.g.,higher commissions). Again, these costs vary dramatically among countries. The good news isthe creation and consolidation of markets, as discussed in Chapter 4.14.14.6 Valuation DifferencesThese individual country differences combine to cause a clear differential in the stock valuationfor an international stock. Specifically, the earnings or cash flow numbers will differ andthe required rate of return (the discount rate) for a non-U.S. stock will differ substantiallybecause there are additional risks noted, such as exchange rate risk, political risk, and higherbiaya likuiditas.14.14.7 ringkasanSingkatnya, Kabar baiknya ketika berinvestasi secara global adalah bahwa proses penilaian adalah samadi seluruh dunia, dan pengambilan keputusan investasi dalam hal perbandingan ultimate intrinsiknilai dan harga adalah serupa. Berita negatif adalah bahwa penilaian internasional efekmemerlukan perhatian untuk beberapa faktor tambahan yang harus dipertimbangkan ketika menilai internasionalsaham. Oleh karena itu, segala sesuatu yang Anda telah belajar tentang analisis dan penilaian relevan,Tapi itu harus diterapkan secara berbeda (yaitu, input berbeda), tergantung pada negara.