Calculation of net assets of the enterprise: formula

In the conditions of independence of business entities, the assessment of the financial condition and investment attractiveness of an enterprise is of great importance. For this purpose, in the framework of economic analysis, many criteria have been developed, but a special place among them is given to the indicator of net assets. How to implement it correctly, you will learn from this article.

Definition

In world practice, net assets have been used for many years, and in Russian appeared relatively recently. In 1995, this indicator was introduced in the Civil Code of the Russian Federation as a normative one, which reflects the procedure for the formation and change of the authorized capital. Although 20 years have passed, but today in the economic literature there is no clear approach to calculating its value. But this indicator appears in the financial statements in the form No. 3 “On changes in capital”.

Net assets of the enterprise (NA) is the difference between the adjusted amount of the organization’s resources and its liabilities. In other words, this is the value of a company without debt. The procedure for calculating net assets was approved in the order of the Ministry of Finance No. 10-n. It is valid for enterprises of all forms of ownership. Calculation of net assets by credit institutions is carried out according to the relevant instructions of the Central Bank. Valuation is carried out once a quarter, as well as at the end of the year. This figure is displayed in the financial statements.

If at the end of the second and any subsequent year, the cost of private equity is less than the authorized capital (UK), then the organization needs to announce a decrease in the authorized capital and register this operation in the prescribed manner. If after the changes the amount of capital is less than the norm established by law, then such an enterprise is subject to liquidation.

Net Asset Calculation: Formula

The following balance sheet items are used to determine the magnitude of ChA:

1. Non-current assets - the first section of the balance sheet, which includes intangible assets, fixed assets, income tax, value investments, long-term financial investments and other resources.
2. Current assets - the second section of the balance sheet, which includes stocks, VAT on purchased materials, DZ, financial investments for the short term, cash and other resources. The OA cost does not include actual costs for the repurchase of shares of an AO organization for the purpose of their subsequent resale or cancellation, as well as the debts of the founders on contributions to the authorized capital.
3. long term duties on loans and credits received.
4. Short-term debt.
5. Bank loan commitments.
6. Debt to shareholders on the payment of dividends.
7. Reserve for future expenses.
8. Other current liabilities.
9. NA = Assets - Liabilities

This is how net assets are calculated. The formula presented above is used to calculate this indicator at enterprises of all forms of ownership, except for organizations that carry out insurance and banking activities.

Other methods

Other regulatory acts describe other schemes for calculating NA. For example, the “Guidelines” indicate that the amount of assets should not include such a line of balance as “VAT on purchased materials”. The fact is that in Sec. 21 of the Tax Code of the Russian Federation, this amount can be reduced by the tax payer only if a large number of conditions are met. The same document says that the line “Reserves for future costs” should not be included in liabilities participating in the calculation of NA. But according to the conclusion of most economists, this article relates more to its own funds than to the obligations of the organization.

Example

Having understood the theory, we turn to practice. In the example, we will consider the calculation of the net assets of LLC.This formula and order are used for enterprises of all forms of ownership.

The balance lines of LLC “Prodzapasy” as of 01.10.2015, which are taken into account in the calculations:

Total ChA as of 10/01/2015: 6750 - 3500 = 3250 thousand rubles.

The value of the net assets, which are calculated to analyze the financial activities of the organization and before dividends are accrued, should ideally be positive and exceed the size of the authorized capital. The growth rate indicates an increase in profit. But the opposite is also possible. More often than not, in the first year of the enterprise’s activity, the value of PA may be less than the UK. But with the normal operation of the organization, the situation should improve in the future.

Registry

Since 2013, information on the value of net assets has been provided to the Unified Federal Register (EFRSUL). It is necessary to enter the following information into it:

• creation of a legal entity (even through reorganization);
• the decision of the federal authority to exclude the organization from the register;
• calculation of net assets of the enterprise;
• liquidation, bankruptcy of a legal entity;
• change in the value of the UK;
• change of registration address.

Thus, information on the cost of the NA is publicly available.

Change in authorized capital

Although the legislation stipulates that if, according to the results of the second and subsequent periods, the cost of private equity is higher than the authorized capital, then these indicators must be leveled, while it is not necessary to reduce the authorized capital. You can increase the NA due to the contributions of participants. But such an obligation must certainly be provided for in the charter. If it is missing, then you must first make changes to the document, and only then change the Criminal Code.

ChA increase

Since 2011, the taxation of profits does not take into account all property that was transferred to the organization with the aim of increasing private equity and generating additional capital.

There was no such opportunity earlier. Now you can increase the ChA without consequences in NU. In BU, the value of property received as a contribution is not income.

The contribution to the LLC OS is reflected in the DT of the account of the accounting for the corresponding intangible assets and KR of account 83 “Additional paid-in capital”. In other words, if the organization received raw materials or goods as a contribution, then this operation will be reflected in the following entry: ДТ 10 (41) КР 83. And if money was received as a contribution, then: ДТ 51, КР 83.

Reduction of the Criminal Code

If you do not succeed in increasing the NA, then you will have to reduce the AC. In this case, you must comply with such state requirements:

• notify of the decision to reduce the UK state registration authority within three business days;
• the next two months to publish in the media information on changes in the amount of capital.

The following data must be indicated in the text:

• full and abbreviated name of the organization, data on the location of the object;
• the size of the authorized capital and the amount by which it will be adjusted;
• conditions for reducing capital;
• description of the procedure for submitting applications by creditors with requirements, additional addresses of the organization, methods of communication with the management (fax, phone, email and other data).

Data processing

The calculation of the net assets of the organization shows only the absolute value. Further, it must be analyzed in the following areas:

• dynamics of change: it is necessary to compare the amount of ChA at the beginning and end of the year, and then identify the causes of the change;
• assessment of the reality of the adjustment: very often, the change in the volume of this indicator at the end of the year is insignificant compared to the general growth of assets;
• correlation of private equity and management company: this allows you to determine the proximity of the enterprise to bankruptcy (this situation may occur if the net assets are less than or equal to the size of the organization’s capital).
• efficiency of use: it is necessary to calculate and analyze the dynamics of changes in the profitability and turnover ratios of private equity.

Consider some of these indicators in practice. First you need to calculate the net assets. Example:

The value of net assets, the calculation of which is presented in the table above, for the period decreased by 21524 thousand rubles or by 27.8%.

According to the results of the calculations, the following conclusions can be drawn: the cost of the private equity exceeds both the size of the company’s management capital and that established by law. The organization is recognized as successful. The management may decide on the distribution of the emergency among the participants.

Calculation of net assets of the bank

It is more expedient to estimate the value of the banking business using an integrated approach, within the framework of which the amount of current NA and their growth in the future will be taken into account due to the current economic potential. In this case, it is important to pay special attention to the assessment of the OS, since they are formed due to equity.

The calculation of net assets occurs at the market value of the property. But this approach is not always justified. In the structure of the bank’s operating system, the main role is played by buildings and technical equipment for data analysis (computers and software). PCs and software age much faster morally than physically, that is, when evaluating them, you need to focus primarily on their book value. But buildings are best valued at market prices. It is not affected by the conditions for carrying out activities, only the economic growth of the region.

Summary

The calculation of the value of net assets should be carried out not only to display the numbers in the reporting documents, but also for the purpose of internal control. Monitoring of this indicator allows you to make management decisions on a change in the value of the authorized capital or ChA. If you let the situation go by itself, then in the best case, management will face the problem of reducing capital, and in the worst, they will have to liquidate the organization.