This paper is designed as a secondary research that summarizes major findings related to the equity valuation models of James Ohlson (1995) and Gerald Feltham & James Ohlson (1995) from the viewpoint of their application in real world circumstances and with only publicly available information at hand. The Ohlson model estimates the value if equity on the basis of its book value and the sum of all future abnormal earnings calculated from a clean-surplus income and a charge for the required return on the equity investment. The consequent Feltham-Ohlson model adjusts the valuation for the effects of conservative accounting practices on book values and earnings. The paper presents a case study of Microsoft Corporation, where the company is valued separately by both models and under different settings of the input data with the purpose to compare the extent to which the models deal with accounting distortions. The study focuses particularly on the impact of deviations from the clean-surplus principle and comments on other deficiencies in the publicly available accounting data. The Feltham-Ohlson model was found more suited to cope with such accounting problems, while the Ohlson valuation produced considerably understated estimates of common equity. The case study also indicated that deficiencies in the reporting of employee stock option compensation, investments and derivatives might produce major inconsistencies in the examined valuation frameworks and distort their results.