Lognormally distributed share returns and IAS: Difference between pages

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If share returns are lognormally distributed it means that the logarithm of [1 + the share return] has a normal probability distribution.
International Accounting Standard(s).


Normal distributions have infinitely long ‘tails’ both upside and downside - so implying unlimited downside potential when used for modelling share returns.


But the theoretically worst outcome for a share investor is to lose the whole of their investment - in other words a negative return of -100%. It is not theoretically possible to suffer a return of worse than -100%.
''Certain International Accounting Standards have been withdrawn or superseded, including:
 
''IAS 3, IAS 4, IAS 5, IAS 6, IAS 9, IAS 11, IAS 13, IAS 14, IAS 15, IAS 17, IAS 18, IAS 22, IAS 25, IAS 30, IAS 31, IAS 35, IAS 39.''


Lognormal distributions - unlike normal distributions - also have a limited downside, so they do not suffer from this theoretical shortcoming.


== See also ==
== See also ==
* [[Lognormal frequency distribution]]
* [[EFRAG]]
* [[Normal distribution]]
* [[FAS]]
* [[Volatility]]
* [[Financial statements]]
   
* [[Financial Reporting Standard]]  (FRS)
* [[Generally accepted accounting principles]]  (GAAP)
* [[International Accounting Standards]]  (IAS)
* [[International Financial Reporting Standards]]  (IFRS)
* [[Statement of financial accounting standard]]
* [[Statement of Standard Accounting Practice]] (SSAP)


[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]

Latest revision as of 10:49, 5 October 2023

International Accounting Standard(s).


Certain International Accounting Standards have been withdrawn or superseded, including:

IAS 3, IAS 4, IAS 5, IAS 6, IAS 9, IAS 11, IAS 13, IAS 14, IAS 15, IAS 17, IAS 18, IAS 22, IAS 25, IAS 30, IAS 31, IAS 35, IAS 39.


See also