0 1 book value. Rules for determining the carrying value of fixed assets
In late winter and early spring, all organizations are actively preparing financial statements for the 2016th year. Let's talk about one of the key indicators of any enterprise - book value of assets. Where to see it in balance for 2016 and how it will help.
Composition of assets and where to look
Any specialist who has ever come across bookkeeping knows the words “balance sheet” and “organization assets”. If you explain their meaning in an accessible language, it turns out that book value assets - this is a certain number of means and benefits that can be expressed in monetary terms.
If we speak the language of accountants about what is the book value of the assets of the enterprise, then this is the amount of all the assets of the company in cash, which is clearly shown in the book. balance sheet.
Assets may be:
- non-current - they are summarized in line 1100 of the balance sheet;
- negotiable - are written in line 1200.
All major types of property and intangible assets are classified as non-current. They appear in the balance sheet according to their residual value (at which they were received / bought taking into account subsequent aging, depreciation and revaluation, which was carried out by the company).
Working capital includes assets, the use of which in the activities of the enterprise to achieve financial success is quite frequent. They are involved for 12 months or another established cycle. These include:
- materials that are needed for production;
- debts of debtors to the company;
- monetary assets and the like;
- VAT on property acquired by the enterprise;
- financial investments, etc.
It’s easy to find book value of assets: this is a line 1600 in balance. It shows the sum of both current and non-current assets.
So there is only one option, where to see the balance sheet value of assets in the balance sheet: it is written in line 1600 balance sheet.
Why do the calculation
Calculation book value of assets doing primarily for financial analysis enterprises. These data are used (see table).
The carrying value of fixed assets isthe value of these assets according to the balance sheet of the company. More details about what is meant by the carrying value of fixed assets - this important indicator in accounting, will be discussed later in our article.
Carrying amount of property
Carrying value is the price of assets at which they are recorded in the balance sheet of the company. Accordingly, the carrying value of fixed assets is their residual value at which they are recorded in accounting.
You can learn about the procedure for calculating the residual value of assets from our article .
Carrying amount of OS - features
The book value almost never coincides with the value of the property dictated by the market, since the mechanisms for determining it vary greatly. Unlike the market one, where the competition factor is of great importance, the book value of the property is formed by adding up all the actually incurred expenses of the company for the construction, acquisition or manufacture of property objects.
How is the average annual book value of fixed assets calculated?
Bearing in mind that the book value of fixed assets is their residual value, we can derive the formula:
BSos \u003d PSos - Am
BSOS is the carrying value of fixed assets;
PSos - initial acquisition price;
Am - accrued depreciation for the period of operation.
Depending on the objectives, there are 2 formulas of the average annual book value of fixed assets. For financial analysis, data from the balance sheet of the company are used. In this case, the average statistical formula is used to calculate the average annual value (BSos (sg)):
BSos (sg) \u003d (BSos (ng) + BSos (kg)) / 2,
BSos (ng) - book value at the beginning of the year;
BSos (kg) - book value at the end of the year.
For tax purposes, you should adhere to the formula presented in paragraph 4 of Art. 376 Tax code. Based on the content of paragraph. 2 of this paragraph, the formula for determining the average annual book value of BSos (sg) property for 2015 is presented in the following form:
BSos (sg) \u003d (OSOS on 01/01/2015 + OSOS on 01/01/2015 + ... + OSOS on 12/01/2015 + OSOS on 12/31/2015) / (12 + 1),
OSOS on ... - the residual value of fixed assets at a specified date.
Carrying amount of equipment
To determine the book value of equipment, you should look at what price it is listed on the balance sheet of the organization. This value is formed by subtracting the accumulated depreciation from the initial purchase price of the equipment for the period after its commissioning.
Only equipment that belongs to the enterprise and is used by it for profit is considered depreciable. A prerequisite for classifying equipment as depreciable will be the initial price, which should not be less than 100,000 rubles (Clause 1, Article 256 of the Tax Code).
You can find out more about depreciation from our article. .
Book value of the enterprise
Determining the book value of the company itself is necessary to assess the effectiveness of its business operations. For this, a reporting document is compiled as a balance sheet consisting of assets / liabilities.
Based on this, the book value of the company should be understood as the total value of its net assets, which are calculated by subtracting from the total assets of all debt obligations.
Summary
Under the book value of fixed assets - this important financial indicator - you should understand only their discount price. The book price has nothing to do with the market value of assets and plays a completely different role.
The concept of book (accounting, residual) value is used in accounting to take into account the effect of depreciation on the value of assets. Non-depreciable assets in financial statements are displayed at their initial cost, but the value of depreciable assets, for example, buildings and equipment, decreases over time due to their depreciation (depreciation). The asset in the financial statements is still shown at initial cost, and the depreciation amount is indicated on a separate line. To calculate the carrying amount of an asset, you simply need to subtract the depreciation amount from the initial cost of the asset.
Steps
Part 1
Understanding book valueDetermination of book value. The carrying amount of an asset is the difference between its initial cost and the amount of depreciation. According to the rules of financial reporting, assets are always displayed at the initial cost, which allows to unify accounting. But the value of large assets, for example, plant equipment, decreases over time, so their depreciation (depreciation) must be taken into account. Subtracting the depreciation amount from the initial value of the asset, you will receive its book value.
Determine the initial value of the asset. You need to know it in order to correctly calculate the book value. The initial cost of an asset is the amount paid to acquire it. The initial cost of an asset is displayed in the general ledger.
Determine the depreciation of an asset. Having found out the initial value of the asset, find the amount of its depreciation (at the current date). This amount is displayed in the general ledger in the line (or in the section) “Accumulated depreciation”. However, as a rule, depreciation of each asset is not displayed, so find a depreciation schedule for the asset of interest to you.
Part 2
Depreciation Calculation- To further explain this method, we calculate the depreciation of the asset for the second year of its operation. To begin with, we determine the carrying value of the asset at the end of the first year of its operation: 1,000,000 - 200,000 \u003d 800,000 rubles. For the second year of operation of the asset, depreciation will amount to 160,000 rubles (20% of 800,000 rubles), and the carrying amount of the asset at the end of the second year of its operation will be 800,000 - 160,000 \u003d 640,000 rubles.
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Use the method of sum of numbers (years). The basis of this method is a calculation algorithm (formula), very similar to the algorithm used in the method of decreasing remainder, but other quantities are used here. The formula is as follows: A \u003d (NS - LS) ∗ (nn + (n - 1) + (n - 2)..) (\\ Displaystyle A \u003d (NS-LS) * ((\\ frac (n) (n + (n-1 ) + (n-2) ...))))
Determine the amount of accumulated depreciation of the asset. This is the balance shown in the Accumulated Depreciation section. We use the above example and the uniform depreciation method. Suppose you want to know the depreciation amount after 6 years. Since the annual depreciation amount is 100,000 rubles, the accumulated depreciation will be equal to 600,000 rubles. If you use other methods of calculating depreciation, repeat the process described for each year until you reach the year you want.
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Subtract accumulated depreciation from the value of the asset. To calculate the carrying amount of an asset, simply subtract the depreciation amount (as of the current date) from the value of the asset. In our example, the book value of the asset after 6 years will be equal to: (1,000,000 - 600,000) \u003d 400,000 rubles.
- Please note that the carrying amount of an asset cannot be less than its residual value, even if the asset is operated for such a long period that when calculating the carrying amount of an asset is less than its residual value. In this case, the carrying amount of the asset is equated to its residual value until the asset is sold (in addition, its value becomes zero).
Decide on the depreciation method. Depreciation of fixed assets is a gradual write-off of the value of an asset in annual expenses. Depreciation can be accrued using several methods. The most common method is the uniform depreciation method, but there are other methods used, such as the decreasing balance method and the sum of numbers (years) method. The choice of method depends on the asset.
Use the uniform depreciation method. In this case, the depreciation amount will be constant throughout the entire period of use of the asset. For example, if the equipment was purchased for 1,000,000 rubles, and its life is 10 years, then the annual depreciation amount will be 10% of 1,000,000 rubles, that is, 100,000 rubles.
Use the declining balance method. This is the method of accelerated depreciation, in which its amount is greater at the beginning of the asset's life (compared to the amount at the end of this term). In this case, you must use the percentage of uniform depreciation. For example, the percentage of depreciation with a double reduction in the balance of an asset whose life is 10 years is 2 x 10% \u003d 20%. This means that the new value of the carrying amount of the asset at the end of the reporting period will be 20% less than the previous value. In our example, for the first year an asset is operated, depreciation will be 200,000 rubles (20% of 1,000,000 rubles).
Part 3
Use of book value-
The difference between the carrying amount and the market value of the asset. The book value is not an accurate estimate of the price of an asset, that is, this value does not reflect the actual market value of the asset. The book value determines the percentage of the initial value of the asset, which can be attributed to expenses (due to depreciation of the asset).
- The market value of an asset is the price that a potential buyer of the asset is willing to pay. For example, factory equipment was bought for 1,000,000 rubles, and the depreciation for 4 years amounted to 400,000 rubles. At the moment, the carrying amount of the asset is 600,000 rubles. But this equipment is outdated (thanks to new technologies), so buyers are willing to pay only 200,000 rubles for it.
- The market value of some assets, for example, complex large-sized machines, is significantly higher than their carrying value. This means that even if the asset has been exploited for a long time and therefore its depreciation is quite high, it is still functioning properly and is in demand.
Different methods are used to evaluate long-term assets (fixed assets, stocks, etc.). One and the same object can be characterized by several numerical values \u200b\u200bof its value. The key concept in accounting is book value. With its help they describe financial position enterprises and make its assessment. In the article, we consider the features of the definition of this indicator and its characteristics.
OS carrying amount
Form No. 1 - the most important document necessary for analysis economic activity enterprises. It is he who gives an idea of \u200b\u200bthe assets and liabilities of the subject. Assets comprise the assets of the enterprise - current and fixed. Accounting for the latter is sometimes difficult: they are repeatedly and continuously used, which affects their cost, and it still needs to be calculated. To simplify this procedure, the concept of book value was introduced. It is used to record the movement of assets and their presence in the enterprise.
The carrying amount of an asset is the sum of its historical cost minus accrued depreciation. Based on the definition, it is clear that for the calculation it is necessary to know two more indicators. The key is the concept of historical cost, since it is also used to calculate depreciation. It is defined as the sum of all expenses for the acquisition or manufacturing (construction) of an object, including delivery and installation costs and excluding the amount of reimbursable taxes. Thus, in order to take the asset into account, it is necessary to deduct the accrued depreciation from the initial cost of the object. The balance of the amount is the carrying amount, which is often symbolically referred to as the residual value.
Revaluation of OS: reflection in the balance sheet
Once a year, the company revalues \u200b\u200bfixed assets. This is necessary so that accounting data does not lose its reliability and relevance. OSs have the ability to become morally and physically obsolete, which is why their cost also changes. If after revaluation of the property it is found that the price of the asset has decreased or increased, the residual value is recalculated as follows:
- Determine the replacement value of the object at the valuation date.
- If the value of the property has decreased, a markdown is made. In the balance sheet indicate the calculated amount minus depreciation.
- In the event of an increase in value, fixed assets are reassessed by restoring depreciation. Changes are made to the balance sheet.
The results of the revaluation of the property are attributed to additional capital, i.e., it either increases or decreases.
Real estate in the balance sheet
Valuation of real estate is carried out to determine its value before selling or buying, leasing and in many other cases. Depending on the direction of activity of the enterprise, objects can be recorded according to their initial cost minus depreciation, or at the current market price.
Investment property is recorded at the end of the reporting period at fair value as determined by the international valuation company. Sometimes it is not always possible to compare the objects of the enterprise with the market, which leads to a deeper analysis. The book value in this case is determined taking into account the profitability of the property.
The residual value of intangible assets
Intangible assets are property that does not have a tangible form. They, like fixed assets, are non-current assets and can be used in the production, marketing or management process. Intangible assets, according to IFRS, evaluate one of two methods:
- at historical cost (cost of acquisition or manufacturing) less depreciation;
- at replacement cost calculated as a result of revaluation, minus accumulated depreciation charges.
All costs of intangible assets arising after the moment of their acceptance for accounting are recognized as other expenses. If the funds are used to improve the properties of the asset, which ultimately leads to an increase in their profitability, capitalize the costs.
Description of assets in the balance sheet
The book value of assets is the sum of all funds of the company, which are reflected in accounting form No. 1. Its value is indicated in line 1600. If it is necessary to calculate the residual value of one of the assets, they perform the steps described above: they determine the initial or replacement value (in case of revaluation) and deduct the depreciation amount from it.
Depending on the purpose, it is possible to calculate the value both for an individual object and for their group. The concept of book value of assets is also widely used. Its indicator perfectly characterizes the financial well-being of the enterprise, which is interesting to third-party organizations (investors, lenders). The book value of assets is the aggregate of all funds, which is calculated as the sum of lines 1100 and 1200 of form No. 1 of the financial statements.
Asset residual value statement
As mentioned above, the asset value indicator is very informative. Any company interested in this can request data. Usually in their role are potential investors, lenders, buyers. At the request of third-party individuals and legal entities, a statement is drawn up on the book value of the assets of the enterprise.
There is no established form for filling it, but usually it is formed like the old balance. For this, the value of each group of assets at the beginning and end of the period is indicated line by line. If necessary, the data is concretized, in more detail describing certain types of funds. The main thing is that the information is true.
The certificate must contain the name of the company, the date on which it was compiled, as well as the signature of the head and chief accountant. The content can be represented by a table (like a balance sheet) broken down into the necessary groups of assets or in the form of a solid text. Regardless of the chosen method of compiling the certificate, it is necessary that the residual value of the company's funds at the beginning and end of the reporting year be indicated in it.
Book value
IN economic analysisIn addition to the indicator of funds of the enterprise, the value of net assets is also used. To calculate it, the sum of lines 1400 and 1500 is subtracted from the value of line 1600 of the balance sheet. Thus, net assets show the amount of funds of the enterprise formed from equity and not burdened with obligations.
When calculating the book value of a security, they speak of a shareholder in the enterprise’s capital. The indicator is defined as the ratio of net assets to the number of ordinary shares issued. In this case, the residual value valuable papers often does not match their pricing in the market. Keep in mind that they do not take into account their own shares repurchased from shareholders.
If the company possesses not only ordinary, but also preferred shares, then the calculation will be somewhat more complicated. The carrying value of securities in this case is defined as the difference between net assets, dividend arrears and the cost of redemption of preferred shares.
Residual value of the enterprise
An organization is also a kind of property that can be valued or sold. To study the effectiveness of economic activity, annually compile form No. 1, which reflects all the means of the enterprise and the sources of their education. On its basis, the book value of the enterprise is calculated. The following formula is used: B st \u003d Ch a - N a, where:
- H a - net assets;
- N a - intangible assets.
Net assets can be replaced by the difference in equity and liabilities of the enterprise.
So, the carrying amount is the amount that reflects the original acquisition price less depreciation. Its value is indicated in the balance sheet for each type of property. If necessary, reassess the funds, and then recount them residual value. In determining the carrying value of shares and enterprises use the concept of net assets.
For the convenience of studying the material, the article book value is divided into topics:
The results of many years of international research by specialists have confirmed the close relationship (high correlation) between GDP per capita, labor productivity and value creation. Productivity was determined by the ratio of the manufactured product to the labor costs of its production. Countries that are not able to increase labor productivity as fast as competitors will suffer from the “flight” of capital from the country, the emigration of qualified specialists and lower living standards.
The reflection of the indicator of the cost of capital of the company is also the value added market (DLS). A change in DLS serves as an indicator of the growth (or fall) of the created value in the planning period and represents the amount of change between the market and book value of ordinary shares (for joint-stock companies) for a given period of time. Similarly, for other enterprises, DRS can also be considered as the difference between the market value of the company and the actual (real) value of assets.
For example, over a 5-year period, indicators of the market and actual book value of assets (capital) of an enterprise amounted to:
Market value of the company: in the 1st year - 1200 million rubles; in the 5th year - 2100 million rubles.
actual book value of assets: in the 1st year - 660 million rubles; in the 5th year - 1100 million rubles.
The added market value of capital for 5 years will be equal to:
Changes in market value: Sryn \u003d 2100 - 1200 \u003d 900 million rubles;
changes in the actual book value: Real.bal \u003d 1100 - 660 \u003d 440 million rubles;
added market value: DLS \u003d 900 - 440 \u003d 460 million rubles.
In Russian law, the actual (or real, net) book value of assets (capital) of a company is defined as follows:
Real ball \u003d OA - DO - NML, (1)
where OA is the total value of assets (balance sheet currency); DO - the total amount of debt obligations (short-term and long-term); Intangible assets - the amount of intangible assets reflected in the balance sheet.
For closed joint stock companies and enterprises of other property firms, where there are difficulties in determining the market value of capital due to their lack of stock market you can use the growth rate of net book value of assets (formula 1), which will also characterize the change in the value of the real capital of the company, and, consequently, of a particular founder. In this case, both changes in the value of the company’s capitalization and its growth rate are determined.
From the above example, the change in the real book value of assets for 5 years amounted to: Real.bal \u003d 440 million rubles, and the total growth rate of capitalization for the planned period is 66.6%:
Qtotal \u003d (1100 - 660) * 100/660
This means that the average annual development rate was qyear \u003d 13.3%. However, for each particular year, the pace of development is set different, in accordance with the strategy for managing the development activity of the enterprise.
Strategic plans are developed on the basis of forecasting for sufficiently long periods (more than 2 years), therefore, all future cost indicators are brought to the present period (discounted) and compared with indicators at the beginning of the planned (present) period, i.e., the change in value is taken into account money for the planning period.
Market value of the company and discounted cash flows (providing capital growth) are interconnected.
For the planned assessment of the cost of capital based on the movement of future cash, it is necessary to find out the projected growth rates of sales and profit margins, the need for working capital and investment, taking into account measures to reduce the cost of corporate activity, as well as other indicators (liquidity, etc.). This means that for planning the cost of a particular company, it is necessary to identify key factors affecting its value, since an increase in sales growth of 1% or an increase in profit margin of 1% and other indicators have a different effect on the growth of the cost of capital.
When planning the growth of the company's value, it is necessary to maintain a certain (rational) balance between the long-term and short-term goals of the company and, accordingly, adjust the balance sheet and the profit and loss statement.
In the creation of the value of the enterprise, not so much the top management as the managers of the middle and lower links take an active part, since the dynamics of lower unit costs, sales growth, trade costs, quality of goods, compliance with the terms of shipment of products, etc. depend on them. , should be considered the process of planning the company's value as a complex process that includes all aspects of business management and takes into account the key factors of the company.
In the process of strategic planning, the important thing is not so much a valuation of the capital growth of an enterprise, as planning activities that ensure such growth. In these events, a possible increase in value in a particular direction is noted, for example, from the implementation of innovations, an increase in value is expected by 15%, from the planned acceleration of the turnover of working capital - by 5, from a real increase in prices - by 3, from a decrease in the cost of production and trading costs - by 4% (quality improvement, etc.). This focus provides a more efficient and balanced management of the development activity of the company, expressed in terms of the value of the company.
This approach confirms the need to identify the determining factors of cost growth and control the level of exposure to these factors. However, it must be borne in mind that key factors can periodically change their importance based on the external and internal conditions of the enterprise. Therefore, the analysis and identification of the degree of influence of each factor is an essential element in the planning system. In addition, cost factors are interrelated, which must also be taken into account.
When forming a strategic plan, various prognostic development scenarios are usually analyzed, where the interactions of cost factors are taken into account. After agreeing and approving a development strategy that ensures the maximum possible value of the company in the planning period, target standards for short-term and long-term periods are developed. Such target standards, expressed in specific indicators, are the criteria for evaluating the management effectiveness of a manager.
Orientation to the indicator of the cost of capital of an enterprise and taking into account the factors of formation of value make it possible to develop economic thinking among managers at all levels of management, since, in carrying out his immediate job functions (production, marketing, supply, etc.), the manager is forced to determine the level of return on his activities taking into account growth company value.
It should be noted that changing the type of thinking requires a sufficiently long time to adapt to new planning tools. In the first year of the implementation of the system based on the value of the company, as a rule, efforts are directed at creating a mechanism to ensure this approach.
The approach includes:
Creation of an appropriate information base;
development of a methodology for determining the value of a company both for the corporation as a whole and for business (business) units;
conducting training seminars for managers and specialists in order to develop economic thinking;
development of a system of organizational support for strategic plans;
ensuring appropriate for the adoption and implementation of planned decisions;
development of economic models for modeling planning decisions under various scenarios of enterprise development.
Thus, the strategic planning of the value of the company will serve as a guide for decision-making at all levels of management. In addition, this creates the conditions for the development of economic thinking among managers and employees on the basis of an analysis of key cost factors, which will increase the focus and effectiveness of activities, as well as avoid increased costs in the process of enterprise development.
Average annual book value
Assets of an enterprise are its resources, expressed in terms of value and used in the process of current activities. The cost of non-current and is reflected in the balance sheet drawn up at the end of the reporting period. Changes in their condition can be analyzed by calculating, among other indicators, the average annual value of assets.Determine the value of the assets of the enterprise at the beginning and at the end of the year according to the balance sheet. Its value is reflected in line 300 "balance sheet total".
Calculate the average annual value of assets by the formula:
Asr \u003d (A1 + A2) / 2, where:
- A1 - the value of the assets of the enterprise at the beginning of the year,
- A2 - the value of assets at the end of the year.
To do this, add the data on line 300 “Total balance” at the beginning and end of the year. Dividing the amount received by two, you will find the average annual value of the assets of the enterprise for the analyzed period.
If necessary, calculate the average annual value of non-current and current assets using the same formula using the results of the balance sheet under section I “Non-current assets” or under section II “current assets”. After making similar calculations based on data from previous periods, analyze the changes in the composition of the organization’s property, identify the reasons that influenced these changes, and make the necessary decisions on the effective management of the firm’s resources.
Carrying amount of real estate
Valuation of real estate is a procedure for determining the value of structures and other objects (inextricably linked to land), the sign of which is the inability to move without causing irreparable damage and is done for rent, pledge and sale, purchase and in other cases.To reflect in the accounting of real estate temporarily not used in the core business, it is necessary to determine the method of such accounting.
Regulation N 302-P as amended by Instructions N 2553-U gives credit organizations the opportunity to choose the cost at which the property will be recorded after initial recognition.
Namely:
At cost less accumulated depreciation and accumulated impairment losses;
- current (fair) value.
The total value of the valuation subject is determined by calculating the value of the valuation subject when using valuation approaches and the valuation justified by the valuer (generalization) of the results obtained through the application of various valuation approaches.
The assessment approach is a set of assessment methods, united by a common methodology. The valuation method is a sequence of procedures that allows, on the basis of information essential for this method, to determine the value of the valuation object within one of the valuation approaches.
The valuation date (valuation date, cost date) is the date on which the value of the valued property is determined.
Real estate valuation. This is the most voluminous type of valuation, it is made for collateral, sale, purchase, statement on the balance sheet and other cases.
What is the overall procedure for assessing the value of real estate?
Independent assessment this is an estimate of the value of various objects - mainly these are commercial real estate objects (office, warehouse and industrial). If you intend to make an assessment of the value of real estate, we will conclude a contract and assignment for the assessment, in which we indicate the necessary parameters of the object, terms and cost. Real estate valuation - the valuation of various objects: buildings, structures, premises, etc. (residential and non-residential facilities). If you are buying or selling, or just thinking about buying a room, order an estimate.
Investment property is carried at the end of each reporting period at a fair value determined on the basis of a valuation report prepared by an international valuation company. Due to the nature of the property and the lack of comparable market information, the fair value of investment property is determined using the income capitalization method, which involves estimating the value based on the expected future benefits that will be received from the property in the form of rental income. When using this method, it is considered net incomeobtained from (comparable) real estate, capitalized to determine the value of the property being valued.
As part of the assessment, we necessarily carry out a market analysis, in which the main indicators are found out: rental rates, cost square meter in various market segments, major trends and other important elements. To assess the value of real estate, we also select analogues of the evaluated object.
For evaluation, we need documents characterizing the building or premises. What parameters are especially important to us?
These are usually parameters such as:
Object area;
the purpose of the object and its component parts (for example, part of the premises is office, and part - commercial);
property rights;
owner of the property;
the book value of the property.
Like the determination of the value of other objects, the market valuation of real estate is carried out by three approaches. In each approach, the most appropriate method is selected. Our experts are well versed in all methods, the report undergoes a detailed audit, which guarantees the quality of the work performed. Assessment of the value of real estate involves the calculation of a certain type of value, most often - market.
Why do you need it and what are the goals of real estate valuation?
Upon receipt of a loan (registration of collateral, mortgage);
Contribution of property to authorized capital;
Determination of property value for an insurance company;
For judicial purposes;
At registration;
Redemption of state property.
What documents do we need to provide?
Certificate of state registration rights (to the building and to the plot);
Floor planexplication;
Cadastral statement on land plot;
Technical passport or extract from the technical passport;
If the property is in balance legal entity, you must provide its book value.
Carrying amount of equity
In the process of analyzing the bank’s equity, the issue of assessing its value is of great importance. Assessing the cost of equity makes it possible to obtain additional information for the adoption of the relevant current and future plans, to determine the effectiveness of the bank.In banking practice, there are several ways to determine the value of a bank’s equity.
Each of them has both positive aspects and certain disadvantages:
The first way is to determine the accounting (book) value of the bank’s equity. According to this method, all assets and liabilities of a bank are recorded on its balance sheet at the cost of their acquisition or occurrence. Equity is calculated as the difference between the carrying amount of assets and liabilities. This method of valuation is acceptable only when the book value and market value of assets and liabilities are not very different from each other. If the market value for one reason or another significantly deviates from the original book value, then this method leads to a distortion of the results, inadequate assessment of the bank’s equity. This method is simple, does not require special qualifications of the bank employees and significant costs for the assessment.
The second method - the market value method - consists in the fact that the bank’s assets and liabilities are valued at market value, based on which the bank’s equity is calculated. This method more accurately reflects the real level of bank security, makes it possible to more dynamically and realistically evaluate the cost of equity, since the market value of assets and liabilities is constantly changing. However, banks are usually not interested in this method of determining the cost of equity, especially when it does not help strengthen the bank's position in the market. This method is usually used by the bank management for internal needs, although it is also useful for external users - depositors and creditors of the bank.
Note that the image of market value has certain flaws. First, it is not always expedient and correct to evaluate assets and liabilities at market value. Secondly, this method is time-consuming, requires highly qualified specialists, as well as significant cash costs.
The essence of the third image - the image of regulatory accounting procedures - is to calculate the amount of equity capital according to the rules and requirements established by the bodies that supervise and control banking activities. For this method, the bank's equity is calculated as the sum of a number of its constituent elements. The procedure for determining and the composition of equity varies from country to country, however, with the aim of protecting depositors and creditors, ensuring financial stability and transparency banking systems near economically developed countries an agreement was made. It defines common basic approaches to determining the composition and procedure for calculating the equity capital of banks of countries that have signed the agreement.
The main provisions of the agreement are used by other countries, in particular Ukraine. In determining the adequacy of banks' equity capital, the National Bank of Ukraine adheres to the provisions of this agreement. At the same time, the NBU is constantly improving the methodology for determining the amount of equity.
Note that this method of calculating equity is inherently disadvantageous. Firstly, by developing a procedure for calculating banks' equity, the National Bank of Ukraine leaves the goals of the body that supervises and controls banking activities and its own monetary policy.
Secondly, the constant change and improvement of this method of calculating the bank’s equity makes it difficult to compare when analyzing the financial condition of the bank. Changing the rules for calculating equity, it is necessary to provide a comparison of its value by listing the data of past reporting periods according to the new rules.
Thirdly, this method allows the inclusion of certain types of debt obligations and reserves to cover losses in equity. This can lead to a distortion of the bank’s performance and create the impression of its successful operation.
The methodological basis for calculating regulatory capital is the provision of the Law on Banks and Banking Activities. In accordance with it, the bank's capital includes fixed and additional and capital.
The components of fixed capital are:
Paid and registered share capital;
- opened reserves (created or increased due to unallocated profit);
- stock price premiums and additional contributions by shareholders to equity;
- a general risk coverage fund created for undetermined risk during banking operations minus losses for the current year and intangible assets.
Car rating, car rating, vehicle rating
Today, the number of cars is increasing every day. And so it’s already hard to imagine our life without a car. New cars are bought, old ones are sold, and there is also a saturated secondary market where used cars are sold and bought. Cars are given on bail, go to the authorized capital of organizations, etc. In general, a huge number of operations are performed with cars in which it is necessary to know their market value.
In the event that it is necessary to determine the real market value of the car, you need to contact a professional expert organization. One of our main activities is the professional assessment of automobiles and motor vehicles. Assessment of the value of the car is made taking into account its technical condition, and actual wear. It should also be noted that independent experts carry out the assessment of cars taking into account all the features of the subject of assessment and have an individual approach to a specific situation.
Why do you need an assessment of cars and vehicles?
Evaluation of vehicles in transactions of sale of a car.
Valuation of a vehicle for litigation.
Estimating the cost of a car for.
Independent auto rating for notarization sales transactions.
Valuation of cars in the division of enterprises.
Assessment of vehicles in order to compensate for the damage caused.
Independent assessment of vehicles during disposal.
Valuation of a car for inheritance.
Assessment of the market value of the car during the liquidation of the enterprise.
Assessment of the market value of the car when changing the form of ownership of the organization.
Independent vehicle assessment for tax purposes.
Assessment of the value of the car when it is entered into the authorized capital of the organization.
Assessment of the car customs clearance.
Independent assessment of a car to determine its collateral value.
Estimation of the cost of vehicles for the enterprise.
Independent assessment of a car for damages.
Auto rating for individuals. The list of documents required for the assessment of the car:
Year of car manufacture.
Car mileage.
Copy of customer passport.
Car assessment for legal entities. The list of documents required for the assessment of the car:
List of vehicles to be evaluated (if there are more than one evaluated vehicle unit).
The location of the vehicle being evaluated (this is necessary if the expert appraiser leaves to inspect your car).
Year of car manufacture.
Car mileage.
Documents for the car (PTS vehicle passport, certificate of registration of vehicles).
Copies of certificates of registration of the enterprise (which owns the car).
The book value of the car being evaluated (initial and residual, if the car to be valued is on the balance sheet of the enterprise).
Name of the head of the organization to which the car to be evaluated belongs.
The procedure for assessing a car (assessing the market value of a car)
It is necessary to coordinate with the representative of the independent expert examination the date, time and place of the vehicle inspection.
If there are other interested parties, invite them by telegram to the upcoming inspection.
On the appointed day and time, present the vehicle for inspection in a clean condition (a condition that ensures the identification of all defects present on the vehicle).
Provide the appraiser with documents for the vehicle.
For a more accurate assessment of the cost of the car, provide the appraiser with additional documents that characterize both the improvement (replacement of components and assemblies, repairs) and the deterioration of the condition of the car (accident certificates, car damage, etc.).
After the inspection, it is necessary to make sure that the description of the condition of the car reflected in the act is correct and, if agreed, sign it.
Car assessment is the process of determining its value by an expert who is documented.
1. The market value of a car is its most likely price at which it vehicle can be sold in a free market and. The buyer and seller act within the framework of the contractual relationship, possess all the information about the transaction object. Determining the market price of a car is a fairly sought-after expert procedure, popularly referred to as auto-examination.
2. The residual value of the car is the cost of a new car identical in characteristics, from which the percentage of wear of a particular car expressed in money is deducted. The deterioration of the car is determined taking into account a number of factors: the actual period of operation of the vehicle being evaluated at the date of the assessment, the actual mileage, which is determined by the speedometer or by calculating the average annual mileage of the car for the period from the date the vehicle was started to the date of the assessment. If the car has already been discontinued, the cost of the upgraded model is taken into account, taking into account the reduction factor. From the cost of a new car, in addition to physical wear and tear, the costs of restoration repair (if there are damage) or the costs of eliminating the associated defects that have arisen during operation are also deducted. The cost of the loss is added to the sum of the costs of restoration commodity value (TCB) car.
3. The liquidation value of the car is its probable price for which it can be sold if the seller must make a deal to sell it (for example, if the company with the car on its balance sheet is liquidated).
4. The utilization cost of a vehicle is the value of those vehicles that have exhausted their resources and must be written off. Or the car has such defects or damage that occurred during operation, in which it is not economically feasible to repair it.
5. Insured value - is determined for the purpose of concluding a car insurance contract and is the market value of the car. Sum insured indicated in insurance policy and insurance contract.
6. car - is determined for the calculation, which are paid at the border crossing.
7. The book value of a car is the value of a car that is on the balance sheet of a legal entity. Carrying amount must be determined for purposes accounting. It is reduced annually due to constant depreciation, which is determined separately for each specific car.
8. The cost of a dismantled vehicle is the market value of a car of a certain model (brand) minus the amount that needs to be spent on the understaffing of the vehicle being evaluated, including the cost of the necessary components, parts, assemblies, as well as retrofitting work.
9. The cost of the car in the presence of additional equipment is determined as its market value plus the cost of additional equipment installed on it.
Carrying amount of intangible assets
Intangible assets (intangible assets) are identifiable non-physical assets that are not in physical form and are used in the production or provision of goods or services, for rental to other parties or for administrative purposes.Intangible assets are licenses, patents (for example, software), intellectual property (for example, technical knowledge as a result of design and research work), trademarks, brands, films and videos.
Goodwill created by the enterprise itself (the business reputation of the organization), trademarks, names of print media, customer databases, costs of developing a new production, advertising, are not included in the intangible assets of the enterprise.
Recognition criteria for intangible assets:
An intangible asset should be identified as an independent accounting object;
An intangible asset must be controlled by an entity;
There is a possibility that future economic from an intangible asset will go to the company;
With a high degree of probability, you can estimate the value of an intangible asset.
According to IAS 38, the identification of intangible assets is possible under the following conditions:
The future economic benefits of using intangible assets can reasonably be separated from the benefits derived from goodwill (the goodwill of the company);
Getting intangible assets is a consequence of a specific business operation;
An asset is separable, i.e. an entity may lease, sell, exchange or distribute future economic benefits from ownership of the asset without losing future economic benefits from other assets.
Obtaining future economic benefits from the use of intangible assets is to ensure a net cash inflow, including increased income or cost savings.
Control of intangible assets means:
The company's right to receive future economic benefits from the use of this asset;
The ability to prohibit other companies from accessing this asset.
Accounting and valuation of intangible assets
An intangible asset should be initially measured at cost, regardless of whether it was acquired externally or created independently. Subsequent costs of intangible assets are recognized as an expense if they restore the established standard results from their use. Capitalization of costs occurs when it is probable that the economic benefits exceeding the initial standard results from the use of the asset will go to the enterprise.
For reference: - this is the allocation of costs to the value of the asset, i.e. increase in asset value.
In accordance with IFRS, methods for accounting for intangible assets:
Initial cost method - accounting for intangible assets at cost less accumulated depreciation and accumulated losses;
The revalued (or fair) value method is the accounting for intangible assets based on the amount of the revaluation less accumulated depreciation and accumulated impairment losses.
The revalued amount should be the fair value of the intangible asset. Such a method is allowed only if the fair value of intangible assets can be reliably measured in the presence of an active sales market for this type of asset. According to IFRS, choosing this accounting method, a company must conduct regular revaluations to prevent a significant difference between the carrying amount of intangible assets and its fair value.
Intangible assets created by the company on its own go through two stages: the stage of research (research work) and development (development work).
The research phase of intangible assets includes:
Activities aimed at obtaining new knowledge;
Search, evaluation and selection of methods for applying the obtained research results;
Search for alternative materials, raw materials, devices, technologies, systems or services;
Formulation, design, evaluation and final selection of possible alternatives for new or improved materials, devices, technologies, systems or services.
The development stage of intangible assets includes:
Design, construction and testing of prototypes and models;
Designing tools, templates, forms and dies, the use of which is provided for by new technology;
Design, construction and operation of a pilot plant;
Design, construction and testing of selected alternative materials, devices, technologies, systems or services.
When creating an intangible asset, expenses at the research stage are taken into account as expenses.
Development costs are recognized as an intangible asset, if any:
The technical ability to complete the creation of intangible assets, which means the possibility of their use or sale in the future;
Clarity on how an intangible asset will create future economic benefits;
The intention to complete the creation of an intangible asset, to use or sell it;
The ability to use or sell an intangible asset;
Availability of appropriate technical, financial and other resources to complete, develop and sell an intangible asset;
An opportunity to estimate expenses.
Depreciation of intangible assets
Depreciation is the systematic allocation of the value of an asset over its useful life. Depreciation of intangible assets begins when the asset is ready for use.
Intangible assets are classified as:
Assets with an indefinite period beneficial use, i.e. There are no visible boundaries for the period during which the asset will generate cash inflows. It is believed that in this case the useful life should be limited to 20 years;
Assets with a defined (limited) useful life when an entity expects an inflow of economic benefits from intangible assets over a limited period of time.
Intangible assets with a certain service life are depreciated on a straight-line basis over the entire service life, i.e. the cost of intangible assets is written off to expenses gradually during the service life in equal shares. An asset should be regularly reviewed for impairment in accordance with IAS 36 if there are indications that the carrying amount of an intangible asset exceeds its recoverable amount.
The carrying amount of assets is the value at which assets are carried on the balance sheet, net of accumulated depreciation.
Intangible assets with an indefinite life (if the assumption of a 20-year period are categorically rejected) are not depreciated, but are subject to annual impairment testing. If the recoverable amount of intangible assets is lower than the carrying amount, an impairment loss is recognized. The assessment should verify that the intangible asset continues to have an indefinite useful life.
It should also be borne in mind that the rules for accounting and depreciation of intangible assets under IFRS may differ from PBU RF.
Intangible asset disclosures
The notes and appendices to the financial statements disclose information for each class of intangible assets. Intangible asset classes are groups of assets similar in purpose and use to the organization’s operations (brands, licenses, franchises, copyrights, related rights and patents, etc.).
In the basic method of accounting for intangible assets (initial cost method) are indicated:
Useful life;
Depreciation methods;
The cost of intangible assets before deduction of accumulated depreciation (taking into account accumulated impairment losses) and the amount of accumulated depreciation at the beginning and at the end of the period;
Write-offs and disposals of intangible assets;
The reasons why determining the useful life of individual intangible assets is considered impossible;
Availability and book value of intangible assets inherent in quality;
The amount of research and development costs included in the expenses of the period.
If intangible assets are carried at revalued amounts, the following information should be disclosed for each asset class:
Actual date of revaluation of intangible assets;
Carrying amount of revalued intangible assets;
The carrying amount of intangible assets that would be included in financial statementsif intangible assets were accounted for using the main method.
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