Joaquina Laffarga

An Evaluation of the Value Relevance of Consolidated versus Unconsolidated Accounting Information: Evidence from Quoted Spanish Firms

In this paper we investigate the value-relevance of consolidated versus parent company accounting information. In particular we investigate the value relevance of the minority interest components of net total assets and earnings as currently reported and under the full entity approach to consolidated reporting. An Edwards-Bell-Ohlson valuation framework is used to generate results. By this means we cast light on the suitability of accounting regulation being developed based upon the entity or parent company theories of consolidation. We carry out the analysis in the Spanish context and the sample contains 474 observations of non-financial firms quoted in the Madrid Stock Exchange for the period 1991–97. The results from this analysis not only have domestic relevance but provide guidance of a more international nature relating to the impact of group definition, concepts of control and the most value relevant method of consolidated disclosure. The results show that, from a valuation perspective, consolidated information dominates non-consolidated, or parent company, information. However, neither the currently reported minority interest components of net total assets and earnings, nor their values under the full equity method of consolidation, are found to be value relevant. These results raise the question of whether group definitions based on the equity theory of consolidation are the most useful to investors.

Biofuels 2020: Biorefineries based on lignocellulosic materials

The production of liquid biofuels to blend with gasoline is of worldwide importance to secure the energy supply while reducing the use of fossil fuels, supporting the development of rural technology with knowledge‐based jobs and mitigating greenhouse gas emissions. Today, engineering for plant construction is accessible and new processes using agricultural residues and municipal solid wastes have reached a good degree of maturity and high conversion yields (almost 90% of polysaccharides are converted into monosaccharides ready for fermentation). For the complete success of the 2G technology, it is still necessary to overcome a number of limitations that prevent a first‐of‐a‐kind plant from operating at nominal capacity. We also claim that the triumph of 2G technology requires the development of favourable logistics to guarantee biomass supply and make all actors (farmers, investors, industrial entrepreneurs, government, others) aware that success relies on agreement advances. The growth of ethanol production for 2020 seems to be secured with a number of 2G plants, but public/private investments are still necessary to enable 2G technology to move on ahead from its very early stages to a more mature consolidated technology.