Landmark judgments conclude that the DCF model is not suitable for Danish public supply companies

The tax value of the Danish water sector’s assets, ie the market value, has been subject to much debate and was recently examined in two pilot cases before the Danish Supreme Court. Arne Møllin Ottosen considers the implications.

The cases are perceived as Denmark’s largest ever. Testing the boundaries for application of the discounted cash flow (DCF) model to markets lacking ordinary commercial characteristics, the judgments are of general interest and specifically will set a precedent for hundreds of cases pending before the Danish Tax Tribunal.