EXCESS EARNINGS METHOD Definition

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EXCESS EARNINGS METHOD is a specific way of determining a value indication of a business, business ownership interest, or security determined as the sum of a) the value of the assets obtained by capitalizing excess earnings and b) the value of the selected asset base. Also frequently used to value intangible assets.

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IFRS see INTERNATIONAL FINANCIAL REPORTING STANDARDS.

INTRODUCTORY PARAGRAPH, in an auditor's report, is the first paragraph of the auditor's standard report which identifies the financial statements audited and states the financial statements are the responsibility of management and that the auditor's responsibility is to express an opinion on the financial statements based on the audit.

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