where line 1600, line 1400, line 1500, line 1530 are the lines of the Balance Sheet (form No. 1), ZU is the debt of the founders for contributions to the authorized capital
Net assets - value
The better the indicator Net assets, the higher the investment attractiveness of the organization, the greater the trust on the part of creditors, shareholders, and employees. Conversely, the lower the value of the “net assets” indicator, the higher the risk of bankruptcy of the organization. Therefore, it is in the interests of the organization’s management to control the value, prevent the indicator from falling to the critical value established by law, and find ways to increase it.
The meaning of the indicator Net assets is an indicator of the well-being or failure of the organization, on the basis of which the owner evaluates the actions of management and makes management decisions.
The value of the Net assets indicator, calculated from the liquidation balance sheet, shows that part of the value of the company's assets that will be distributed among the company's owners upon liquidation. We are talking about both the actual liquidation balance sheet and the balance sheet compiled under conditions of fictitious liquidation. Those. under the assumption: “What do the owners expect if the liquidation procedure is started now?”
The amount of net assets is a subjective assessment. This subjectivity is due to the following circumstances:
- if the calculation is carried out according to the balance sheet, then the value of net assets is, as a rule, underestimated due to the use of historical prices in the balance sheet, i.e. cost estimates that are lower than current market prices of assets. This applies even to current assets, since the LIFO method is often used to value inventories, which undervalues inventories.
- If we are talking about the liquidation balance sheet, then the conventionality of calculating this indicator is due to the subjectivity of market estimates (or liquidation prices) used in constructing the balance sheet.
The category of net assets has practical meaning if we are talking about characterizing an operating enterprise using this indicator. If we are talking about a liquidated enterprise, then the value of net assets is calculated at the beginning of the liquidation period as an estimate of the funds that will be distributed among the owners according to participation in the authorized capital. During the liquidation process, calculating the amount of net assets no longer makes sense.
Net assets - diagram
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To assess the financial position of an organization for a specific period of time, it is necessary view the company's balance sheet for a certain period of the report, since it contains the main numerical indicators of the company’s activities, which are needed for accurate calculations on the balance sheet.
Also, to determine them, developed special requirements, reflected in Order of the Ministry of Finance of Russia No. 84N dated August 28, 2014.
Net assets are any property, which remains the property of the organization after the closure of all existing obligations. In this regard, the volume of net assets is one of the main values for the financial characteristics of a company.
The main significant factor net property fund is that this number demonstrates the financial profit of the company, from which all existing debt to creditors and partners is calculated.
This financial independence of the company is regulated by the Federal Commission and the Ministry of Finance Russian Federation which carry out supervisory activities over the activities of the Central Bank of the Russian Federation.
Guidelines of such government bodies were developed specifically for LLC. However, due to the lack of other types of methods in regulatory documents, these developed guidelines are applicable to companies of any form of ownership.
The most effective value of a company's net assets is at the time when such value is established. They are used to analyze:
- the success of the financial condition of the enterprise;
- the effectiveness of the organization’s chosen policy;
- cash security of the company;
- the cost of each share prescribed to participants in the business process.
Since the importance of the net asset balance is equated to the performance of the organization as a whole, this indicator must be constantly maintained at the proper level and special interest must be shown in it.
Net asset structure
Net assets indicator determines the presence of property of the owner of the enterprise, regardless of his economic activity.
It turns out that it characterizes the presence of financial and other firms after making all payments due to the state and private individuals.
Thus, net assets are expressed as the difference between the sum of all the firm's existing assets and its debts. It turns out that these direct characteristics form the basic structure of net assets.
They are formed from specific lines of the balance sheet and report and are divided into two groups:
- a category that consists of components of the owner’s property that is not subject to turnover;
- fixed assets that are in constant circulation throughout the entire period of the enterprise’s production activities.
- property not related to financial assets;
- basic resources;
- Construction in progress;
- monetary investments, which represent financial investments with subsequent profit;
- investing funds on a long-term basis.
Next group components for determining net assets on the balance sheet are located in the next section of the main reporting document.
- reserves, as well as value added tax on acquired funds and liabilities of debtors;
- investing for a short period of time;
- financial assets and others that are in circulation.
Included in net assets do not include:
- actual expenses spent on purchasing shares in ownership for further liquidation or re-export;
- unpaid share contributions from the shareholder, to the fixed capital - capital.
The reduction in size occurs due to the existence the following liabilities:
- cost of short-term debt;
- finance to cover long-term debt;
- debt on existing loans;
- unpaid income to investors and shareholders;
- cash reserves from profits.
Such elements can also include other values related to the financial sources of the company or its debt to credit institutions.
Calculation of net assets
To determine the required value, it is necessary to include in the calculation all available assets, in addition to the receivables of the founders of the enterprise and liabilities. The exception is all kinds government support and other types of free assistance.
Data
Net assets are in the form book value of all property of the owner, which remains with him after the return of material assets to creditors.
Any necessary value for calculating such a numerical indicator is taken from the balance sheet for the actual period of time applied to the calculation.
Particular attention must be paid to the two parts of the balance sheet because almost all the values of each part must be taken into account in the calculation.
The exception is:
- the amount of money contributed by the owners to expand the fixed capital, because they are already provided for in other lines of the document;
- the total amount of capital and income received, if they have not already been distributed.
These exceptions appear in Section 3, Inventories and Capital.
Net assets are calculated twice a year and are displayed in the balance sheet lines in Form No. 3 by all firms, regardless of their organizational status.
Formula
To determine you need to use existing formula:
line (b) 1600 (or line (b) 1100 + 1200) – non-payment of owners (line (b) 1400 + line (b) 1500) = net assets, where
line (b) is a line of the balance sheet, line (b) 1600 - assets that are in circulation and not in circulation, line (b) 1400 - the debt of the founders for a long period of time, line (b) 1500 - the debt of the owners for a short period of time term.
In addition to balance numbers it is possible use of accounting information. It turns out that the essence of this calculation will be expressed in making calculations using indicators that are indicated on specific accounting results.
So the formula will have next view:
line (b) 1300 – debt balance according to the result (75) + credit debt according to the result (98), where
line (b) 1300 - reserves and capital, debt balance of the result (75) - the total debt of investors in the status fixed capital, credit debt of the result (98) - profit of the coming time.
Example
Assets not involved in turnover:
- the balance of material assets worth 1,500 rubles;
- investments in unfinished construction – 650,000 rubles;
- short-term investments - 400,000 rubles.
In circulation:
- financial and non-financial reserves – 200,000 rubles;
- debts of creditors - 300,000 rubles, including the amounts not contributed by the owners to the total capital - 70,000 rubles;
- balance sheet liability.
Reserves and capital:
- status fixed capital – 150,000 rubles;
- non-dispersed profit – 1,000,000 rubles.
Long-term loan debts– 600,000 rubles.
Short-term debt:
- short-term loans – 250,000 rubles;
- debts to the state budget – 150,000 rubles;
- other mandatory payments of a short-term nature – 750,000 rubles.
Total assets: 1500 + 650,000 + 400,000 + 200,000 + 300,000 = 1,550,000 rubles.
In this calculation, the owners’ unpaid finances in the amount of 70,000 rubles are not taken into account.
Amount of liabilities: 600,000 + 250,000 + 150,000 + 750,000 = 1,750,000 rubles.
Inventory and capital are not taken into account when calculating liabilities.
It turns out that the amount of net assets on the balance sheet will be equal to 1,750,000 – 1,550,000 = 200,000 rubles, which is average indicator of a company's economic activity.
Accounting line
All contained data necessary for financial calculations in the financial statements of the enterprise, displayed in monetary terms. In this case, information is accepted at the end of the period for which the report is produced.
If there is a need to determine an indicator for a different date, then transitional annual, quarterly or monthly reports are compiled.
The amount of net assets is recorded in line 3600 of form No. 3 “Report on changes in fixed assets.” If a negative indicator is obtained, this value is taken into brackets.
If less than authorized capital
If the net assets during calculation are negative, then the legal entity it is necessary to reduce the authorized capital until it is equal to net assets and register data change in the Unified State Register of Legal Entities.
Also, the company must reduce payments to employees until the value of net assets exceeds planned expenses.
It should be taken into account that the legislation does not provide for any liability for violations committed to reduce net assets relative to fixed capital.
Negative net assets
A negative net asset value occurs when the company has a total amount of debt greater than it owns property.
It turns out that a company that has paid all its debts to creditors and government agencies automatically becomes bankrupt.
To organizations that experienced a negative net asset result, for presentation current situation the term “shortage of property” is used, which indicates a mandatory decrease in the characteristics of fixed capital or the cessation of the company’s production activities.
If the owner has a lower net asset value for the reporting period than those established by federal regulations on the activities and registration of organizations, liquidation is necessary.
The resulting negative amount indicates that the company is directly dependent from its debts to creditors.
Assessing the solvency of a company
An analysis of a company's solvency presupposes the owner's ability to make timely and full mandatory payments. To assess solvency, you need:
- compare net assets with the amount of capital;
- Finally, analyze the changes.
An important factor in the assessment is the difference between solvency and creditworthiness, where the ability to repay borrowed loans demonstrates the company's ability to make payments on obligatory loans using easily marketable types of asset.
Solvency, in turn, is a reflection of the ability to cover existing debts with the help of quickly realizable funds and hard-to-realize ones, such as equipment, real estate, production facilities and the like. All these elements influence the stable long-term development of the organization.
State tax authorities also evaluate the financial statements of companies and blacklisted those enterprises whose net assets are less than their fixed assets.
Negative or minimum net assets are the result of the maximum financial losses that occurred in the reporting or previous period.
When identifying such enterprises, the Federal Tax Service Inspectorate carries out explanatory work with the founders of the organization, where it is proposed to increase net assets. Otherwise this the company will be declared bankrupt and liquidated.
Increase in net assets
To short time to increase net assets, you can use in the following ways:
- Revaluate fixed assets. Current legislation allows for the revaluation of only a certain type of identical objects. This means that the owner or founders have every right to revalue the most valuable property. However, when increasing net assets in this way, it is necessary to annually evaluate the authorized capital, which entails additional time costs for accounting activities. Another disadvantage is that, along with the value of the property, the amount of state duty on it will increase.
- . Thus, the owner can donate various tangible and intangible assets to his company. The exception is that if the share of at least one of the owners does not exceed 50%, then this assistance it is impossible to provide.
- Investing in the organization's property. This type is possible only for the founders of an LLC and can be provided in the form of money, securities and other valuables that have a cash equivalent.
- Reflection of received funds in accounting under account 83 “Additional capital”. Thus, the owners' investments in property do not change the volume of their parts in the fixed capital. In accordance with this, there is no need to carry out registration actions in the Unified State Register of Legal Entities, only decision taken founders.
- Carry out an inventory of property or check the inventory, based on the results of which - write off the excess. This type does not require extra expenses. But personal income tax must be paid on the amount of material assets written off. At the same time, the final result of the check is not known to anyone, and it may turn out that instead of an excess, there may be shortcomings of values that are unrealistic to write off.
- Deduction of bad debts on a loan. This method involves adding bad debt to profit and does not require unnecessary costs, both financial and time. To do this, it is necessary to issue an appropriate order from the owner
- Do not write off accounts receivable whose statute of limitations has expired.
Control over net assets must be carried out constantly, since this indicator is evidence successful activities companies.
The procedure for determining the net asset value is presented in this video.
ruble, thousand rubles, million rubles, billion rubles
Explanation of the essence of the net asset value indicator
Net assets (English equivalent Net assets) - the amount of assets minus the company's liabilities. This indicator allows you to roughly understand the value of the company in the event of its immediate liquidation. Of course, the fair market value of individual assets may be under- or over-valued compared to their book value. However, this indicator is used if there is no access to the company’s internal reporting.
Standard value of the net asset value indicator:
Lenders use the indicator to roughly assess their level of security. The value of net assets equal to zero or lower will indicate a high risk when lending to a company, because in the event of bankruptcy, not all demands of interested parties will be satisfied. A high positive value (relative to total assets) can be considered normative.
The calculation of this indicator is regulated by Order of the Ministry of Finance of Russia dated August 28, 2014 N 84n.
Directions for solving the problem of finding an indicator outside the standard limits
Resuming the growth of net assets is possible only in conditions of the resumption of profitable activities. The reserve for reducing costs and increasing income can be found in all areas of the company's activities.
Calculation formula:
Net assets = Assets – Current liabilities – Long-term liabilities – Receivables of founders for contributions to the authorized capital + Deferred income arising in connection with the gratuitous receipt of property and government assistance
Net assets = Assets (excluding receivables from the founders for contributions to the authorized capital) – Liabilities (excluding deferred income arising in connection with the gratuitous receipt of property and government assistance)
Notes:
1. Off-balance sheet assets and liabilities are not taken into account when calculating net assets.
2. Indicators such as “Deferred income arising in connection with the gratuitous receipt of property and government assistance” and “Receivables of founders for contributions to the authorized capital” are usually not reflected in the balance sheet of companies.
Calculation example:
Company OJSC "Web-Innovation-plus"
Unit of measurement: thousand rubles.
| Balance | On 31 December 2016 | On 31 December 2015 |
| Assets | ||
| I. NON-CURRENT ASSETS | ||
| TOTAL FOR SECTION I | 786 | 634 |
| II. CURRENT ASSETS | ||
| Accounts receivable | 6 | 7 |
| - accounts receivable from founders for contributions to the authorized capital | 0 | 0 |
| TOTAL FOR SECTION II | 497 | 465 |
| Balance | 1283 | 1099 |
| Liabilities | ||
| III. OWN CAPITAL AND RESERVES | ||
| TOTAL FOR SECTION III | 653 | 534 |
| IV. LONG TERM DUTIES | ||
| TOTAL FOR SECTION IV | 105 | 106 |
| V. SHORT-TERM LIABILITIES | ||
| revenue of the future periods | 6 | 5 |
| - deferred income arising in connection with the gratuitous receipt of property and government assistance | 0 | 0 |
| TOTAL FOR SECTION V | 525 | 459 |
| Balance | 1283 | 1099 |
Net asset value (2016) = 1283 – 105 – 525 = 653 thousand rubles.
Net asset value (2015) = 1099 – 106 – 459 = 534 thousand rubles.
The amount of net assets is growing during 2015-2016. from 534 thousand rubles. up to 653 thousand rubles, which indicates an increase in the welfare of investors and improved protection for creditors. Thus, the company's financial position becomes more stable. OJSC "Web-Innovation-plus" should continue to work in the same direction.
We have prepared detailed instructions, how to calculate net assets - the calculation formula for the 2020 balance sheet will clearly show how to make the calculation. See where net assets appear on the balance sheet? What line is this on the balance sheet? And also, what is the formula for calculating their values.
Net assets in 2020
The concept of net assets cannot be considered without reference to the Civil Code. It is the Civil Code that establishes net assets as indicators of liquidity for companies of various organizational and legal forms (LLC, JSC, unitary enterprises, partnerships, etc.).
So for an LLC, net assets are the real equity capital of the organization, that is, what will remain at the disposal of the company after the organization sells all its property and pays off all creditors.
Calculation of net assets on the balance sheet
To estimate the value of net assets, a calculation is made based on financial statements. The calculation procedure was approved by Order of the Ministry of Finance of the Russian Federation dated August 28, 2014 No. 84n “On approval of the Procedure for determining the value of net assets.”
The assets accepted for calculation in 2020 include:
- Non-current assets are our fixed assets, intangible assets, construction in progress, profitable investments in tangible assets, etc. according to Section I of the Balance Sheet form (OKUD 0710001) Appendix No. 1 to Order of the Ministry of Finance of the Russian Federation dated July 2, 2010 No. 66n
We exclude settlements with the founders as part of Financial investments (debt of the founders for contributions to the authorized capital, postings Debit 75 Credit 80)
- Current assets – inventories, value added tax on acquired assets, cash etc. according to section II of the Balance Sheet form.
The liabilities accepted for calculation in 2020 include:
- Short-term liabilities for loans and borrowings,
- Long-term liabilities for loans and borrowings, we also include annealed tax liabilities;
- Accounts payable
- etc. according to sections IV and V of the Balance Sheet form
We exclude – income from future periods (clause 6 of the Procedure for determining the value of net assets).
Formula for calculating net assets on the balance sheet in 2020
The formula for calculating net assets on the balance sheet can be schematically presented as follows:
Look at which balance sheet lines you take the data for calculations from.
Balance sheet structure.
* - balance line 1170 – Financial investments section Non-current Assets;
**- balance sheet line 1530 – Deferred income section Current Liabilities
Net assets: what line of the balance sheet is this?
When filling out annual reports, the accountant must reflect net assets in the form Report on changes in capital (OKUD 0710003) Appendix No. 2 to Order of the Ministry of Finance of the Russian Federation dated July 2, 2010 No. 66n.
Why do you need to calculate net assets?
Calculating the value of net assets is very important, and above all for owners - they invest their funds and want to see how profitable these investments are.
The task of an accountant is to accurately and timely reflect the facts of economic activity. But in reality, to run a business, an accountant is also required to analyze the net assets indicator, which gives a clear picture of the functioning of the organization as a whole.
Net Asset Analysis
The efficiency of using net assets is characterized by return on equity. Profitability is efficiency, and if the net asset indicator is less than the authorized capital, then this means one of two things - either ineffective use of the enterprise's assets - investments that do not generate profit, or a distortion of accounting data. Either of the two options is fraught with business consequences.
Change in net assets
If in the first case it is necessary to change the amount of the authorized capital to the amount of net assets and, in accordance with Federal Law dated 02/08/1998 N 14-FZ “On Limited Liability Companies”, make changes to the constituent documents, and then submit information for the change to the Unified State Register of Legal Entities, then in the second option - interest arises on the part of the Tax authorities. And, again, we can reduce the authorized capital to the minimum authorized capital, for an LLC equal to 10,000.00 rubles.
An increase in the net asset indicator is possible due to a change in the value of assets (revaluation of fixed assets - remember, if we decide to revaluate, we do it every year), or a change in the value of liabilities (for example, writing off accounts payable for which the statute of limitations has expired over 3 times years), or through the help of the founders (additional capital).
Conclusion
A well-functioning organization should have net assets equal to line 1300 of the Balance Sheet form and, moreover, greater than the amount of authorized capital, line 1310 of the Balance Sheet form. This indicates the solvency of the organization and its attractiveness to investors.
Review of the latest changes in taxes, contributions and wages
You have to restructure your work due to numerous amendments to the Tax Code. They affected all major taxes, including income tax, VAT and personal income tax.
To timely ensure the adequacy of equity capital and control over the proper fulfillment of obligations, the legislation provides for the determination of the value of net assets.
Net assets - These are assets secured by the organization's own capital. In other words, this is the book value of the assets that would remain at the disposal of the participants of a commercial organization if it were to pay off all its obligations.
In general, the amount of net assets is calculated by organizations (with the exception of insurance organizations and legal entities carrying out professional and exchange activities in securities) once a year - on January 1. The legislation may establish a different frequency<*> .
When determining the amount of net assets, balance sheet data is used<*> .
Net asset value is determined as the difference between the value of assets and liabilities taken into account<*> .
The assets accepted for calculation include <*> :
- long-term assets (section I of the balance sheet): fixed assets, intangible assets, profitable investments in tangible assets, investments in long-term assets (including equipment for installation and Construction Materials), long-term financial investments, deferred tax assets, long-term accounts receivable, other long-term assets;
- short-term assets (section II of the balance sheet): inventories, long-term assets intended for sale, deferred expenses, value added tax on purchased goods, works, services, short-term receivables, short-term financial investments, cash and cash equivalents, other short-term assets.
The liabilities accepted for settlement include <*> :
— long-term liabilities (section IV of the balance sheet): long-term loans and borrowings (excluding interest on them), long-term obligations for lease payments, deferred tax liabilities, deferred income, reserves for future payments, other long-term liabilities;
— short-term liabilities (section V of the balance sheet): short-term loans and borrowings (except for interest on them), short-term part of long-term liabilities, short-term accounts payable (including interest on loans and borrowings), liabilities intended for sale, deferred income, reserves for future payments, other short-term liabilities.
The calculation formula can be schematically presented as follows:
Calculation of net asset value is completed in accordance with Appendix 1 to Instruction No. 35 dated June 11, 2012. The calculation provides not only the final indicators of the balance sheet sections on lines 190, 290, 590, 690, but also their components.
Example. The value of net assets as of January 1, 2017 amounted to 14,905 thousand rubles. Let's calculate the net asset value as of January 1, 2018.
Initial data from the balance sheet:
Long-term assets (line 190 of the balance sheet) – 53,350 thousand rubles.
Short-term assets (line 290 of the balance sheet) – 337,301 thousand rubles.
Long-term liabilities (line 590 of the balance sheet) – 70,329 thousand rubles.
Short-term liabilities (line 690 of the balance sheet) – 234,959 thousand rubles.
Net asset value atJanuary 1, 2018 will be 85,363 thousand rubles. (53350 + 337301 –70329 – 234959).
The value of the organization's net assets for 2017 increased significantly compared to 2016 (RUB 85,363 thousand ˃ RUB 14,905 thousand). The organization's level of equity capital is high.
Note that since the assets and liabilities taken into account correspond to the results of the balance sheet sections, the value of net assets will be equal to the value of equity capital (the total of section III of the balance sheet).
Please note that if at the end of the second and each subsequent financial year the value of the net assets of a commercial organization will be less than the authorized capital, such an organization is obliged, in accordance with the established procedure, to reduce its authorized capital to an amount not exceeding the value of its net assets.
If the value of the net assets of a commercial organization for which the minimum size of the authorized capital is established by law, based on the results of the second and each subsequent financial year, decreases below the minimum size of the authorized capital, such organization is subject to liquidation in the prescribed manner<*> .