Tag: Discounted Cash Flow

Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of a company today, based on projections of how much money it will generate in the future.

Norway vs Cytec, March 2019, Borgarting Lagmannsrett, Case No 2017-90184

Norway vs Cytec, March 2019, Borgarting Lagmannsrett, Case No 2017-90184

The question in the case was whether Cytec Norway KS (now Allnex Norway A/S) had paid an arm’s length price for an intra-group transfer of intangible assets in 2010. Cytec Norway KS had set the price for the accquired intangibles at NOK 210 million and calculated tax depreciations on that basis. The Norwegian tax authorities found that no intangibles had actually been transferred. The tax Appeals Committee determined that intangibles had been transferred but only at a total value of NOK 45 million. The Court of appeal upheld the dicision of the Tax Appeals Committee, where the price for tax purposes was estimated at NOK 44.9 million. Click here for translation Norway vs Cytec 19 March 2019, Borgarting Lagmannsrett Case No 2017-90184 ... Continue to full case
Denmark vs Water Utility Companies, November 2018, Danish Supreme Court, Case no 27/2018 and 28/2018

Denmark vs Water Utility Companies, November 2018, Danish Supreme Court, Case no 27/2018 and 28/2018

These two triel cases concerned the calculation of the basis for tax depreciation (value of assets) in a number of Danish Water utility companies which had been established in the years 2006 – 2010 in connection with a public separation of water supply and wastewater utility activities. The valuation of the assets would form the basis for the water utility companies’ tax depreciation. The transfer was controlled and subject to Danish arm’s length provisions. The Supreme Court found that the calculation method (DCF) used by the Danish Tax Agency did not provide a suitable basis for calculating the tax value of the transferred assets. The Court stated that for water supply and wastewater treatment it is true that the companies are legaly obligated to provide these facilities and that the governmental regulation of the activity – the “rest in itself” principle – means that no income can be earned on the activities. However, the decisive factor is the value of these assets for the ... Continue to full case
Finland vs. Corp. February 2014, Supreme Administrative Court HFD 2014:33

Finland vs. Corp. February 2014, Supreme Administrative Court HFD 2014:33

A Ltd, which belonged to the Norwegian X Group, owned the entire share capital of B Ltd and had on 18.5.2004 sold it to a Norwegian company in the same group. The Norwegian company had the same day transferred the shares back on to A Ltd. C ASA had also been transferred shares in other companies belonging to the X group. C ASA was listed on the Oslo Stock Exchange in June 2004. Following the transaction with the subsidiary the Tax Office had raised A Ltd’s income for 2004 with 62,017,440 euros on the grounds that the price used in the transaction were considered below the shares’ market value. Further, a tax increase of EUR 620 000 had been applied. A Ltd stated that the purchase price for the shares of B Ltd had been determined on the basis of the company’s net present value, calculated according to a calculation of the present value of cash flows in the B ... Continue to full case