DCF Valuation Framework

This post describes the handling of leasing liabilities and leasing expenses wihtin the concept of discounted cashflow or DCF valuation. It is a follow-up post after IFRS 16 – Leases and What is Debt?, answering the question of How to Capture Lease Payments into Perpetuity. But first, I do a quick Introduction to DCF Valuations to get a better understanding of the topic.

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What is Debt?

As announced in my previous post about IFRS 16 Leases, this follow-up post dicusses the question of What is Debt? . First, I describe common Features of Debt and Leasing Liabilities as well as answering Why to treat them as Debt. Then I discuss What Items to include in Debt and How to calculate Net Debt. Finally I give a Summary of the article and an Outlook on a further follow-up post discussing How to incorporate Net Debt within a DCF Valuation.

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IFRS 16 – Leases

As more and more financial reports discuss the topic of IFRS 16 – Leases adoption and how its affects their reporting, I decided it is time to get a better understanding of the scope of IFRS 16 and how it affects reporting items within Balance Sheet, Income Statement and Cashflow Statements. In conclusion, I am going to describe some effects on Financial Ratios as well as giving an outlook on implications on Net Debt and Valuation Concepts.

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