The Major Accounting Adjustments to Calculate Eva. An Application to Brazilian Firms

19 Pages Posted: 18 Mar 2005

See all articles by Eduardo Kayo

Eduardo Kayo

Mackenzie Presbiterian University

Leonardo Cruz Basso

Mackenzie Presbyterian University - Business Administration

Silvia Franco de Oliveira

Mackenzie Presbiterian University

Date Written: March 2, 2005

Abstract

The shareholder value creation is becoming an answer to the pressure of the investors and councils. Many approaches are available. Among them, the Economic Value Added (EVA), developed by Stern Stewart & Co. To correct the improprieties perceived in financial statements, some users of EVA adjust the income numbers based on the Generally Accepted Accounting Principles (GAAP), expecting that such adjustments may produce more trustworthy values and generate an environment favorable to a management behavior closer to the optimum. Besides that, this work investigates the correlation between the Brazilian Controller's understanding and the use of the company adopted accounting methods.

Keywords: value-based management, economic value added, Accounting adjustments, equity equivalents

JEL Classification: G12, M41, M44

Suggested Citation

Kayo, Eduardo Kazuo and Cruz Basso, Leonardo and Oliveira, Silvia Franco de, The Major Accounting Adjustments to Calculate Eva. An Application to Brazilian Firms (March 2, 2005). Available at SSRN: https://ssrn.com/abstract=677582 or http://dx.doi.org/10.2139/ssrn.677582

Eduardo Kazuo Kayo (Contact Author)

Mackenzie Presbiterian University ( email )

São Paulo
Brazil
3236-8597 (Phone)
3236-8600 (Fax)

HOME PAGE: www.mackenzie.com.br

Leonardo Cruz Basso

Mackenzie Presbyterian University - Business Administration ( email )

Rua da Consolacao, 896 7 - andar sala 73
01302-907 Sao Paulo
Brazil
+55 11 32368597 (Phone)
+55 11 32368600 (Fax)

Silvia Franco de Oliveira

Mackenzie Presbiterian University ( email )

São Paulo
Brazil
32368597 (Phone)
32368600 (Fax)

HOME PAGE: www.mackenzie.com.br

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