Browsing by Author "Lamprecht, Christiaan"

Now showing 1 - 5 of 5
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    The case for business rescue
    (Accountancy SA, 2010-6) Lamprecht, Christiaan
    ENGLISH SUMMARY : The penalty for declaring bankruptcy in ancient Rome was slavery or being cut to pieces. The choice was left to the creditor. By the Middle Ages, the treatment of insolvent debtors had softened considerably. In northern Italy, bankrupt debtors hit their naked backsides against a rock three times before a jeering crowd and cried out, "I declare bankruptcy". In French medieval cities, bankkrupts were required to wear a green cap at all times, and anyone could throw stones at them. (World Bank, Doing business in 2004)
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    Context-specific indicators to guide the judgement of a going concern for a company in business rescue
    (AOSIS, 2020) Lamprecht, Christiaan; Van Wyk, Hendrik A.
    Orientation: Annual financial statements are normally prepared based on the going concern assumption that a company will continue to exist in the foreseeable future and that it has neither the intention nor the need to enter liquidation or to cease trading. Research purpose: To establish indicators of a going concern in the context of a South African listed company under business rescue. Motivation for the study: Current research is lacking in business rescue context-specific indicators of a going concern. Research approach/design and method: A grounded theory method was followed by using a qualitative systematic interpretive literature review to identify possible indicators of a going concern in the context of a South African listed company under business rescue. Main findings: In the context of a listed company under business rescue, financial distress, state of commercial and technical solvency and the foreseeable future are important indicators of its going concern status to be considered in combination with the particular business rescue aim pursued and stage of implementation of a business rescue plan. Practical/managerial implications: The indicators would assist preparers and auditors of financial statements to assess appropriately the financial reporting assumption in a business rescue context. Contribution/value-add: The findings provide guidance to preparers and users of financial statements and auditors by showing context-specific indicators of a going concern for use when preparing the financial statements of a South African listed company under business rescue.
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    The many faces of earnings before interest, tax, depreciation and amortisation (EBITDA) : assessing the decision usefulness of EBITDA disclosure by Johannesburg Stock Exchange-listed companies
    (AOSIS, 2020) Mey, Mattheus T.; Lamprecht, Christiaan
    Orientation: The voluntary disclosure of non-Generally Accepted Accounting Principles (non-GAAP) earnings may lack decision-usefulness if not faithfully represented or comparable. Commonly accepted as being well defined, earnings before interest, tax, depreciation and amortisation (EBITDA) may be misleading if labelled, defined and calculated inconsistently. Research purpose: To assess the decision-usefulness of EBITDA disclosure by Johannesburg Stock Exchange (JSE)-listed companies. Motivation for the study: Prior research on voluntary disclosure largely excluded EBITDA from its focus, accepting it as standardised. Research approach/design and method: A quantitative content analysis was used to analyse the EBITDA disclosure in 220 Stock Exchange News Service (SENS) reports in which JSE-listed companies reported their annual results for the period 2014–2016. Main findings: Companies inconsistently labelled, defined and calculated EBITDA. Twenty-four per cent of the SENS reports labelled and defined EBITDA as earnings before interest, tax, depreciation and amortisation, but calculated it by adjusting for other items as well. Companies’ definitions of EBITDA also differed widely, with 27 different definitions identified in 52 SENS reports that disclosed an unmodified EBITDA label. Practical/managerial implications: Existing JSE reporting requirements appear lacking in ensuring that companies disclose EBITDA that is faithfully represented and comparable. The identified diversity of definitions has implications where EBITDA is used for valuation and contracting purposes. Contribution/value-add: The study contributes to the voluntary disclosure literature by focussing on a non-GAAP earnings measure that has largely been ignored by prior research, namely EBITDA. Empirical evidence is presented on the diversity that exists in EBITDA disclosure by JSE-listed companies.
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    Valuation practices under business rescue circumstances in South Africa
    (AOSIS Publishing, 2020) Conradie, Shaneen; Lamprecht, Christiaan
    Background: A business rescue plan should indicate the benefits of adopting a business rescue plan as opposed to the benefits of immediate liquidation. Performing a valuation is thus a vital aspect of the business rescue process as the estimated values determine the amount to be divided between creditors and, if possible, shareholders. Conventional valuation methods have the underlying assumption that the business is a going concern (based on liquidy and solvency tests). However, a company in business rescue is not necessarily a going concern, nor in liquidation, leaving the company in a grey area in terms of valuation. Aim: This research explored how the business rescue value of a financially distressed company is determined. Setting: The setting for this study was South Africa. Method: Thematic analysis of qualitative data collected through 11 semi-structured interviews with senior business rescue practitioners (BRPs). Results: When the intention is to return the company to solvency, the BRPs prepared a short-term, undiscounted cash flow budget to determine the business rescue value, but without including a terminal value in the projected cash flows. In contrast, when the intention is to obtain a better return compared to immediate liquidation, BRPs follow an asset approach to determine the business rescue value. The results also showed that the business, digital and relational acumen of the BRP is a major influencer in the business rescue value. Conclusion: The financial elements identified and substantiated in this study may serve as best practice guidance in the business rescue industry and lead to an expansion of the existing valuation theory.
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    What are the indicators of a successful business rescue in South Africa? ask the business rescue practitioners
    (AOSIS Publishing, 2018) Conradie, Shaneen; Lamprecht, Christiaan
    Background: Business rescue, in terms of Chapter 6 of the Companies Act No 71 of 2008, is still relatively new to the South African business environment. The need for a successful business rescue regime is beyond doubt. However, a consistent manner to measure the success of the regime has not been determined. Previous research into possible indicators of business rescue success was based on a review of international business rescue regimes that share the same underlying philosophy as the South African business rescue regime. Aim and Setting: This study extends previous research efforts by soliciting the opinions of 16 South African, senior business rescue practitioners on the indicators of business rescue success. Method: The researchers used a qualitative research approach. The Delphi research technique was used to gather qualitative and quantitative empirical data from business rescue practitioners. Results: The experts reached a high level of consensus on various indicators of a successful business rescue. Most notable are that business rescue should save as many jobs as possible and that the actual outcome should be compared to that estimated in the business rescue plan. A novel indicator of success is the business rescue points saved or rescued, when using the public interest score. Conclusion: The study makes a valuable contribution to the debate on what constitutes a successful business rescue by adding the considered opinion on indicators of success by one group of experts in the field of business rescue, namely senior business rescue practitioners.