In simplest terms, the value of a company or business unit equals the combined values of debt plus equity. The total value of the company is called Corporate Value (v5060), and the value of the equity portion is Shareholder Value. Shareholder Value (v5070.00) is expressed in present value terms. In general:
Corporate Value = Debt (v5060.00) + Shareholder Value (v5070.00)
The debt portion of Corporate Value (v5060) refers to the current value of all the firm's future obligations. These obligations are Market Value of Debt (v5.00.500), Underfunded Pension Liabilities (v5.00.520), and Market Value of Other Obligations (v5.00.540).
Additionally, an adjustment must be made for the minority interest value of a company or business unit that is consolidated into the total Corporate Value using the Minority Interest Method.
Shareholder Value (v5070.00) is calculated as:
(v5060.00) Corporate Value
- (v5.00.500) Market Value of Debt
- (v5.00.520) Underfunded Pension Liability
- (v5.00.540) Market Value of Other Obligations
- (v5.00.920) Valuation Adj. for Min. Interest: SVA
= (v5070.00) Shareholder Value