Understanding Value Creation: The Shareholder Value Perspective

This paper explains the concepts of value from two perspectives, namely: stakeholders and shareholders. Value perception differs for different stakeholders. It is attempted here to explain the measures of value for stakeholders as well as for shareholders. Different methods used for computation of shareholder value are illustrated through a case example. The paper hopefully will serve as an instrument of communication to the professionals attempting to understand the all inclusive meaning of value as well as to the practitioners engaged in accounting/financial services/auditing functions.