Investments in a long-term perpective - how a family company has built its assets

Abstract: In this thesis the debate between the two regimes of historical cost accounting and fair value accounting is exemplified with observation of real estate valuation over time. The aim of the study is to contribute to the understanding of how different value concepts are of relevance in a real estate company. An explorative case study illustrates the different value concepts used for accounting and management in a family owned real estate company, the Kjellbergs. The rebuilding of Kvillestaden in Göteborg finished thirty years ago is analysed, presenting how the family company has built its assets over a long period of time. The study shows how contradicting accounting methods are used in an integrative accounting that presents different financial values built on personal values. A model of accounting communication is used to analyse significance and fidelity of each value concept. The financial value concepts identified for real estate are: investment value, book value, tax value and market value. Customer value is the operational focus area for the Kjellbergs and is based on the three personal values underpinning the management of the firm and the investment decisions. These personal values are identified in: well thought through operations, high quality assets and long-term ownership. A conclusion is drawn that the different value concepts are of relevance in an integrative manner. The integrative use of the different value concepts, financial and personal, is seen as the key success factor in the operations of the firm through eight decades. Another conclusion of the study is that different value concepts are relevant because of the strong twofold relation between the owner of the company and the buildings and their tenants on the one hand and on the other hand between the owner and the accounting and its external users such as municipalities and banks.