abstract
By discipline: "Estimation of the value of the enterprise"
Topic: “Cost approach.
Residual value method"
Introduction……………………………………………….…..……………….…….3
1. Cost approach…………………………………………………………….….4
2. Definitions for the concept of salvage value……………………8
2.1 Salvage value method……………………..……………….9
2.2 Types of salvage value……………………..………………...9
3. Methods for assessing the salvage value……………………………….12
3.1 Algorithm for determining the liquidation value based on
accounting data on liabilities………………………………………..…12
3.2 Algorithm for determining the liquidation value based on
accounting data on the asset…………………………..………………..14
Conclusion……………………………………………………………………… 16
Bibliography…………………………………………………..………………..17
Introduction
a) orderly liquidation
b) forced liquidation
The salvage value is the market value of the appraised property minus all costs associated with its sale, including commissions for sale, advertising costs, storage costs, etc.
1. Cost approach
Cost approach - a set of methods for estimating the value of an object based on determining the costs necessary for the reproduction or replacement of an object, taking into account its wear and tear.
The cost of manufacturing an object and its subsequent implementation is very important factor in value formation.
Cost approach methods imply a mandatory assessment of the possible full cost of manufacturing an object and other costs borne by the manufacturer and seller. These methods are indispensable when it comes to objects that are practically not found on the open market and are manufactured according to individual orders, including special and unique equipment.
When evaluating by the cost approach, the process of forming the seller's price (offer) is modeled, as it were, based on considerations of covering all costs incurred by the price and obtaining sufficient profit. Since cost approach methods often do not proceed from real prices for similar objects, but from calculated standard costs and standard profit, they, strictly speaking, give an estimate not of a purely market value, but of the so-called value of an object with a limited market.
Cost valuation methods can be divided into:
Resource-technological models of assessment;
Normative-parametric models;
Index methods of evaluation;
Resource-technological models of assessment. In general, a typical resource-technological model can be described as follows:
Compared to the assessment of the object as a whole, its assessment based on the resource-technological model allows to more accurately take into account the impact of the configuration of the object and, consequently, the composition and values of its technical characteristics, on the value of the cost. However, in this case, the center of gravity is transferred to the assessment of the cost of its components and assemblies, which is justified only if there is a developed market for these components. Such a market exists so far only in the field of office and computer equipment.
Normative-parametric models. In contrast to the resource-technological model, in the normative-parametric cost of the assessed object, it is considered as a function of the totality of its technical characteristics, and not components.
In general, a typical normative-parametric model can be described as follows:
FROM
AT- specific (per unit of productivity or power) cost of the base product;
D– power or performance of the object being evaluated;
K- a summary coefficient characterizing the dependence of the unit estimated cost or price of the product on the value of the parameters. It is equal to the product of partial coefficients that take into account the influence of the relevant parameter on the estimated cost or price of the product;
Regulatory-parametric models have been successfully applied in the development of a number of wholesale price lists that can serve as a source of relevant regulatory information.
Index Methods of Evaluation. Often, as part of the cost approach, the index method is used. The use of price indices for many appraisers is one of the simplest and most effective (especially in mass valuation) ways to solve valuation problems. Price indices are relative indicators that reflect the dynamics of price changes. In many countries, state statistical bodies publish indices of domestic and foreign trade prices for individual goods and commodity groups. Price indices are always given with an indication of the base year in which the index value is assumed to be 100% (or = 1).
In general, the corresponding model is described as follows:
FROM- the desired value of the object of assessment;
Co - the basic cost of the object, for example, its full replacement cost, contained in the statistical report on the results of the previous revaluation of fixed assets;
I- index (chain of indices) of price changes for the relevant group of machinery and equipment for the period between the date of assessment and the previous revaluation of fixed assets.
The basis for calculating domestic wholesale price indices is not the prices of specific transactions, but mainly nominal prices. Therefore, published indexes provide only an approximate picture of the dynamics of list prices, and not the prices of actual transactions. Depending on the situation in this moment, terms of the transaction, including terms of payment, sales volume, specific prices will differ to some extent from the list prices.
Price indices - important indicator, which allows you to identify the main trends in price movements. They are widely used in the analysis and forecast of market conditions, making it possible to assess the changes that have occurred in the price level over a number of years. True, it must be taken into account that the index, as an average and relative indicator, as well as the unit value, does not give a sufficiently accurate idea of the changes that have occurred in the prices of any particular product. With the help of indices, it is possible to identify the dynamics of prices for the products of entire industries or, in extreme cases, any product groups. The indications of such a group index may differ from the price dynamics of the goods included in this group with specific quality indicators. However, the calculation using the index method can distort the estimated value for a number of reasons. We list some of them:
The result depends on the accuracy of determining the historical cost;
Difficulty finding a suitable index row;
Uncertainty of relative weights when deriving indices;
Index deprecation;
Accumulation of errors.
The procedure of the cost approach begins with the collection and analysis of information about the internal structure of the object, its structure and the composition of the main elements. At the same time, one technical specifications not enough, required detailed description designs, drawings general view and specifications. A thorough inspection of the object is also carried out.
In the methods of the cost approach, an important role is also played by the assessment of the degree of depreciation of the object being evaluated, this is due to the fact that the cost of reproduction or the cost of replacing the object obtained at the beginning does not take into account depreciation, and only at the next stage the resulting cost estimate is adjusted for the actual depreciation of the object (physical, functional and external) .
2. Definitions for the concept of salvage value
One of the following assumptions is usually used to determine salvage value:
a) orderly liquidation(Orderly Liquidation): sale of assets within a reasonable period of time necessary to obtain the highest price for each of the assets sold;
b) forced liquidation(Forced Liquidation) involves the sale of assets as quickly as possible, for example, at an auction (the liquidation value in a forced liquidation is often called the auction value - Auction Value).
The salvage value includes not only the method of sale, but also the costs of the sale, the costs of maintaining assets until the sale and other costs. Usually, though not always, when valuing an absolute control interest in shareholding salvage value represents the lowest limit of value.
2.1 Residual value method
The salvage value is the market value of the appraised property minus all costs associated with its sale, including commissions for sale, advertising costs, storage costs, etc.
The salvage value may vary depending on whether the sale is urgent or occurs in the normal course of business. In the latter case, the salvage value will be close to the true market value less costs.
The problem of liquidation value appears when an organization is deprived of economic and organizational opportunities to independently generate value, primarily surplus value, while maintaining financial, economic, labor obligations recognized by law to other subjects of civil circulation.
The liquidation value is the net amount of money that the owner of the enterprise can receive when the enterprise is liquidated and its business is closed, the separate sale of assets and after settlements with all creditors.
2.2 Types of salvage value
There are three types of salvage value:
· Orderly, when the sale of the assets of the liquidated enterprise is carried out within a reasonable period of time so that the highest possible selling prices of the assets can be obtained;
· Forced, when the company's assets are sold as quickly as possible, often simultaneously and at the same auction;
· The cost of the termination of the existence of the assets of the enterprise, when the assets of the enterprise are not sold, but written off and destroyed. The value of the enterprise in this case is a negative value, since in this case certain costs are required for the destruction of tangible assets.
The sequence of work on the calculation of the orderly liquidation value of the enterprise, i.e. the value that can be obtained in the orderly liquidation of the enterprise's business, is as follows:
· Development of a calendar schedule for the liquidation of the company's assets.
· Calculation of the current value of assets, taking into account the costs of their liquidation.
· Adjustment of the current value of assets.
· Definition of size of obligations of the enterprise.
· Subtraction from the current (adjusted) value of assets of the value of the company's liabilities.
The development of a calendar schedule for the liquidation of the assets of the enterprise is carried out in order to maximize, as far as possible, the proceeds from the sale of assets to pay off the debt owed to the enterprise.
As a rule, it is assumed that the business of the enterprise is terminated and only the process of liquidation of the enterprise is carried out. The liquidation of a large enterprise takes about two years.
Calculation of the current value of assets is carried out using the method of accumulation of assets, using the balance sheet data of the enterprise on the date of assessment (or on the last reporting date). Checking and adjusting the balance sheet accounts are carried out simultaneously with the inventory of the enterprise's property on the date of assessment. The inventory of the property of the enterprise is carried out in accordance with the methodological guidelines for the inventory of property and financial obligations. Simultaneously with the inventory of the property of the enterprise, the market value is calculated land plot where it is located and the current value of the remaining assets.
Adjustment of the current value of assets. When calculating the liquidation value of an enterprise, it is necessary to take into account and subtract from the value of assets the costs associated with their liquidation. These are the administrative costs of maintaining the operation of the enterprise until the completion of its liquidation, commission payments, necessary taxes and fees, severance payments and payments, transportation costs for the sold assets, etc. The proceeds from the sale of assets, net of associated costs, are discounted to the valuation date at an increased discount rate that takes into account the risk associated with this sale and the timing of the cash flow.
After adjusting the balance sheet asset items, it is necessary to adjust the balance sheet liability in terms of long-term and current debt. Special attention in this case, it is necessary to pay attention to the settlement of preferred shares, tax payments, as well as the so-called contingent liabilities, which often arise as a result of ongoing or potential litigation. It is possible that in the course of the analysis of accounts payable it will be possible to negotiate on changing the conditions for repaying the company's debts.
After determining all the costs associated with the liquidation of the enterprise, the adjusted value of all assets of the balance sheet is reduced by the amount of costs associated with the liquidation of the enterprise, as well as by the amount of all liabilities of the enterprise. Thus, the value of the liquidation value of the enterprise is obtained.
3. Methods for assessing the salvage value
The direct method is based on a comparative approach and can be carried out either by direct comparison with analogues, or through statistical modeling (correlation-regression analysis). However, this method has limited applicability in Russian conditions due to the insufficiency and inaccessibility of the information base on transaction prices in conditions of forced sale (including bankruptcy proceedings).
The indirect method is expressed in the calculation of the liquidation value of the object relative to its market value. It is carried out in three steps: calculation of the market value of the object, calculation of the discount for the forced nature of the sale of the object, calculation of the liquidation value of the object. In this work, we used this option.
3.1 Algorithm for determining the liquidation value based on accounting data for liabilities
This calculation is possible in several ways.
First option
This approach is suitable for calculating the liquidation value of an OJSC whose shares were quoted on a domestic or foreign stock exchange in the form of ordinary, preferred shares and American (global) depository receipts by the time the calculation was ordered.
This approach assumes that it is required to calculate the total value of the entire property complex of the liquidated (reorganized) organization and that the organization is sold as a whole, and not in parts.
At the beginning of the calculation, the appraiser should understand the value of the price / profit ratio (P / E) that took place during the previous months of stock trading (presumably, it is rational to analyze the last three months). It is rational to accept the market prices of shares of a liquidated (reorganized) joint-stock company for the calculation of the liquidation value without additional adjustment if this coefficient for a given joint-stock company differs from the industry indicator by no more than 10%. For large negative deviations, you will need to introduce an additional reduction factor.
The liquidation value of the property complex is calculated on the assumption that the existing organization of production and management at the enterprise is being liquidated (replaced), but remains technological capability create value in cash, fixed and revolving funds, labor force.
Second option
It is assumed that the technological viability of the liquidated (reorganized) organization is preserved when the existing management is changed (or liquidated). It is further assumed that the asset is somehow cumulatively (cumulatively) valued and it is required to determine the amount of net assets to determine the value of accumulated liabilities. Net assets will be determined as the difference settlement amount assets and the estimated amount of debts of the organization.
The main task is to determine the cost of debt, deducted from the estimated amount of the asset. The algorithm of this calculation can be represented by a set of the following actions:
a) calculate debts on loans and credits for the entire term of the debt according to the rules of discrete accumulation. The amount of compound interest debt is calculated as:
FV = P(1 + r)n, (2)
the amount of debt payable at a simple interest rate:
FV = P, (3)
where FV is the future value, that is, the amount of debt payable;
P - the amount of the principal debt;
r - the interest rate adopted in the agreement, in fractions of a unit;
n is the term for which the debt is accepted, in years, fractions of a year;
b) determine the amount of the debt for the rest of the liabilities accounted for as accounts payable either in the amount of a fixed nominal value, or, if the agreement or established rules provide for an additional payment of interest upon repayment of debts on time, according to formulas (2, 3).
3.2 Algorithm for determining the salvage value based on accounting data for the asset
The liquidation value in the event of liquidation (bankruptcy) and reorganization of an enterprise (organization) and making a decision on its calculation through an assessment of the value of individual elements of the asset is subject to determination using sequential actions within the framework of a special procedure.
The adoption of such a decision means that the enterprise - the subject of assessment is no longer considered by the market (or the state) as an operating single organizational and technological complex capable of creating real value. Appraisers in the Russian Federation have domestic methods for calculating the value of each of the elements of an accounting asset operating enterprise(current organization).
The liquidation value as an economic and appraisal category requires a number of additions to the well-known recommendations. First of all, when calculating the liquidation value, the appraiser is forced to focus more on the current, real prices of the material elements of the asset, and also take into account the conditions for the use of these production and non-production assets in a different way, not as it was in the liquidated enterprise (liquidated organization), otherwise. Similar we have shown in section 5. At the same time, the restrictions shown by us in section 1 regarding land, subsoil, etc., remain in force.
The initial information for calculations is contained in the balance sheets, accounting registers, accounts, inventory sheets. The balance itself needs, as a rule, analysis and clarification.
Conclusion
The cost approach has exceptional versatility; theoretically, any object of technology can be evaluated by this approach. With the cost approach, the sum of the costs for the creation and subsequent sale of the object is taken as a measure of cost, i.e. its cost.
The salvage value may vary depending on whether the sale is urgent or occurs in the normal course of business. In the latter case, the salvage value will be close to the true market value less costs.
The problem of liquidation value appears when an organization is deprived of economic and organizational opportunities to independently generate value, primarily surplus value, while maintaining financial, economic, labor obligations recognized by law to other subjects of civil circulation.
The salvage value method in valuing the business of an enterprise is applied when the enterprise is in a situation of bankruptcy or liquidation, or there is serious doubt about the ability of the enterprise to remain in operation and continue its business.
The liquidation value of the appraised object can be calculated by direct or indirect method.
The direct method is based on a comparative approach and can be carried out either by direct comparison with analogues, or through statistical modeling (correlation-regression analysis).
The indirect method is expressed in the calculation of the liquidation value of the object relative to its market value.
Bibliography
1. L.A. Drobozin. Analysis financial activities enterprises. Textbook. - M., 2000
2. Kovalev V.V. Analysis economic activity enterprises. - M, 2002
3. Romanovsky M.V. Business analysis and valuation. Textbook. - M., 2000
4. Valdaytsev S.V. Business valuation. Enterprise value management. M.: UNITI, 2002
5. Shulyak P.N. Enterprise finance. - M., 2002
6. Esipov V.E., Makhovikov G.A., Terekhova V.V. Business valuation. St. Petersburg: Peter, 2002
7. Business valuation. Ed. Gryaznovoy A.G. and Fedotova M.A. M.: Finance and statistics, 2005
8. A.M. Kovalev. Analysis of the economic activity of the enterprise. - M., 2001
Assessment of the liquidation value of the enterprise
1. The concept and types of liquidation value of the enterprise
The situation of bankruptcy and liquidation of an enterprise is an emergency. The probability of a positive solution to the problem of non-payment, which usually accompanies this situation, depends on the value of the property that the enterprise possesses. And not only the problems of non-payments, but also the solution of issues related to the material well-being of the employees of the enterprise, to a certain extent depend on the value of the property of the liquidated enterprise.
However, the valuation of the enterprise is necessary not only in the event of liquidation of the enterprise. It is important in many other cases, for example:
When financing the debtor's enterprise;
when financing the reorganization of an enterprise;
when reorganizing an enterprise carried out without a trial;
when developing a plan for repaying the debts of an enterprise-debtor that is under the threat of bankruptcy;
when analyzing and identifying the possibility of separating individual production capacities of an enterprise into economically independent organizations;
when evaluating applications for the purchase of an enterprise; in the examination of fraudulent transactions for the transfer of property rights to third parties; in the examination of enterprise reorganization programs.
Estimating the liquidation value of an enterprise in a bankruptcy situation has a number of features, mainly due to the nature of the emergency itself. These features should be taken into account by the appraiser, the customer and other parties interested in the results of the salvage value assessment.
Another feature of assessing the liquidation value of an enterprise is high degree Third party dependencies on the evaluation results.
Estimation of the liquidation value of an enterprise (business) is carried out in the following cases:
the company is in bankruptcy or there are serious doubts about its ability to remain a going concern;
The value of a company in liquidation may be higher than in continuing operations.
Currently, there are many definitions of salvage value, the differences between which are quite significant in terms of practical work appraiser, so it makes sense to give the most famous of them.
In particular, most often they refer to the definition of liquidation value given by the leading American appraiser S. Pratt. In his opinion, it represents the net amount of money that the owner of the enterprise can receive in the liquidation of the enterprise and the separate sale of its assets. At the same time, Pratt believes that the liquidation value of the enterprise as a whole is usually less than the amount of proceeds received from the separate sale of its assets. It is difficult to agree with this: as Russian practice shows, the separate sale of the assets of an enterprise most often leads to the sale of property for a pittance and is accompanied by a clarification of the relations of the parties interested in the sale of property in court.
Of the other interpretations of the liquidation value, I would also like to dwell on the following definitions:
1. According to State standard Russian Federation GOST R 51195.0.02-98 “Unified property valuation system. Terms and definitions liquidation value of property: the value of property in case of its forced sale.
2. In accordance with the Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 255 “On approval of the FSO “Purpose of valuation and types of value”, when determining the liquidation value of an enterprise, an estimated value is determined that reflects the most probable price at which this valuation object can be alienated over the period exposure of the appraisal object, which is less than the typical exposure period for market conditions, in conditions when the seller is forced to make a transaction for the alienation of property. When determining the liquidation value, in contrast to determining the market value, the impact of extraordinary circumstances is taken into account, forcing the seller to sell the appraisal object on conditions that do not correspond to market ones.
As can be seen, neither definition speaks of salvage value as occurring exclusively in the case of a separate sale of property, although both standards also consider salvage value exclusively in the plane of a forced sale.
The liquidation value is divided into three types:
1. Ordered salvage value. The sale of the assets of the enterprise is carried out within a reasonable period of time so that high prices can be obtained for the assets being sold. For the least liquid real estate of the enterprise, this period is about 2 years.
2. Forced salvage value. Assets are sold as quickly as possible, often at the same time and in the same auction.
3. The liquidation value of the termination of the existence of the assets of the enterprise (utilization). In this case, the assets of the enterprise are not sold, but written off and destroyed, and a new enterprise is being built in this place, giving a significant economic or social effect. In this case, the value of the enterprise is negative, since certain costs are required to liquidate the assets of the enterprise.
2. Typical cases of salvage value occurrence
Typical cases of salvage value occurrence are:
Liquidation of the enterprise;
Realization of collateral objects;
Accelerated sale of other property.
When an enterprise is liquidated, it becomes necessary to develop a clear schedule for the sale of property and the repayment of the enterprise's debt (moreover, situations are not uncommon when the total amount of income from the sale of property does not cover all debts). At the same time, the terms of exposure (pre-sale activities and the sale itself) are very limited due to the need for a fairly quick release from assets and repayment of debt. It is the question of available time that plays in this case a decisive role in the magnitude of value (ceteris paribus).
In turn, the duration of the time period is determined by the conditions of each specific case of liquidation. At the same time, it must be borne in mind that the very decision to liquidate can be either voluntary (that is, there is a planned action) or forced. As a rule, the first case gives greater variability in decision-making and allows you to develop more effective plans for the liquidation of the enterprise.
Forced liquidation in the bankruptcy process is carried out when a decision is made to open bankruptcy proceedings based on the results of external management. The formed bankruptcy estate is subject to sale at an open auction (with rare exceptions provided for by the Federal Law “On Bankruptcy”). At the same time, the terms for the sale of property are extremely limited.
Thus, it is necessary to distinguish between voluntary and involuntary liquidation.
Realization of collateral objects in the context of this work is rather a hypothetical (disconnected from reality) concept. In this case, the determination of the liquidation value is necessary to justify the lower limit of the loan, which is secured by the pledged property, and we are not talking about the actual fact of the sale of the object. However, in order to provide a loan, the lender needs to know at what price it will be possible to sell the collateral in a short time if the loan is not repaid. This value in some sources of literature is called collateral. However, it can be argued that in its economic essence, it is also liquidation, since there are factors of limited time and forced sale.
The accelerated sale of other property due to the limited exposure time also makes it necessary to determine the liquidation value. At the same time, there are also several options for such implementation - either it is an initiative (voluntary) implementation, or forced (under duress), provided for by the current legislation.
So, in the process of enforcement proceedings, the property seized by a court decision is sold, and within a period not exceeding two months from the date of the seizure (Federal Law of July 21, 1997 No. 119-ФЗ “On Enforcement Proceedings”).
Thus, the liquidation value of the property is almost always lower than its market value. And this fact is negative for the seller of property and, of course, positive - for the buyer.
3. Factors that determine the difference between salvage value and market value
All factors underlying the liquidation value or accompanying it can be conditionally classified (Figure 1).
Rice. 1 Residual value factors
Objective factors are present in determining the salvage value in any situation. Their influence cannot be ignored, and, in fact, they practically do not depend on the state of affairs at a particular enterprise (with the exception of the general state of property). At the same time, all objective factors have a mutual influence on one another. So, for example, favorable market conditions can reduce the optimal exposure time, etc.
The most important factor influencing the differences in market and liquidation values is the exposition period of the property. At the same time, the shorter the planned exposition period of the liquidated property compared to the optimal one, the stronger the possible cost is reduced.
Diagrams 1-3 show the ratio of the market and liquidation values of real estate in Moscow in 1998-2000. (in %)
Diagram 1: Ratio of market value and salvage value of office buildings and premises, %
Diagram 2: Ratio of market value and liquidation value of the sale of commercial buildings and premises, %
Diagram 3: Ratio of market value and salvage value of the sale of warehouse and industrial buildings and premises, %
In fact, the period of exposure of property is a fundamental factor that significantly affects all other factors, both in the direction of strengthening their impact, and weakening. Obviously, with an increase in the planned exposure period, there are more real opportunities for using effective marketing activities, leveling the negative impact of short-term market-forming factors, etc.
The general investment attractiveness of an object is based on the individual characteristics of the property (functional purpose, physical condition) and has a direct impact on the level of consumer demand.
In the case under consideration (during the liquidation of the enterprise), specific factors are activated, which can be conditionally called “spin-off factors” (in principle, these factors are very close to the factor of investment attractiveness). The essence of these factors is that many objects of the property complex individually do not represent any value and in fact cannot be sold at a normal price, while these objects played a significant role within the liquidated enterprise. The impact of the analyzed aspect on the so-called intangible assets and, first of all, on business reputation firm (goodwill), which includes the value of personnel, relationships with suppliers, the smoothness of the business structure, etc. When a company is liquidated, it is not possible to realize this, sometimes one of the most valuable assets.
The absolute value of the market value of the object has an inverse effect on the level of liquidity - the higher the market value of the object, the less effective demand for it becomes due to a decrease in the number of potential buyers.
The factors of direct impact on the level of the cost of objects include the market situation during the liquidation period. The longer this period, the more opportunities the company has to analyze the situation on the market and choose the most best option actions under the circumstances. And vice versa, with a short exposure period and unfavorable market conditions, losses in the sale of objects will increase even more. And it is at least unreasonable to hope for a general rise in the market during the short period of liquidation of the company.
The effectiveness of marketing is also significantly complicated by the short duration of the period allotted for the relevant activities. However, it equally depends on the specific means used to increase the selling price of the object.
Another important objective factor is psychological aspect forced sale, which is expressed in a certain impact on the initiative of buyers. Moreover, the impact of this factor is also quite twofold - on the one hand, feeling that the seller is in initially unfavorable conditions, buyers begin to dump, but on the other hand, feeling competition with each other, they are afraid to lose the property being sold and are forced to compromise.
Subjective factors reflect the specifics of each particular enterprise. These factors are especially negative in enterprises with inefficient managers, which leads to significant difficulties during liquidation. Such factors include whole system phenomena. Thus, the inventory and evaluation of fixed assets of bankrupt enterprises is almost always hampered by the state of accounting registers, the lack of technical passports for equipment and BTI passports for real estate. This series continues with the lack of legal documents for the property, the complexity of accounting, the lack of employees who can provide the necessary explanations. All these facts lead to the fact that before drawing up a specific plan and determining the timing of liquidation, it is necessary in the full sense of the word to "rake" the property of the enterprise, to restore the chains of occurrence of certain obligations both on the part of the enterprise itself and its partners. This leads to a colossal complication of the liquidation process.
However, it would be wrong to think that the factors considered are always only negative. On the contrary, clear organizational structure and effective conscientious work of the enterprise's divisions can contribute to a significant acceleration of liquidation processes.
Indeed, instead of spending 3-6 months to identify the current state of the property of the enterprise in case of its ownerlessness, it would be better to use this period to increase the time for the sale of the property complex, which is very important.
4. Methods for assessing the liquidation value of an enterprise
The calculation of the liquidation value of the enterprise includes several main stages:
1. A number of statistical and accounting documents are analyzed, which include: accounting reports at the end of each quarter, statistical reports, interim liquidation balance sheet, inventory cards. Based on a comprehensive financial analysis, an expert conclusion is made on the sufficiency of funds to cover the debt.
2. The estimated mass of property is formed. The following groups of assets are considered separately:
The most liquid (current assets).
Less liquid (non-current assets).
3. The amount of the company's debt is formed.
4. A liquidation schedule is being developed. It should be noted, however, that the sale various kinds company assets ( real estate, machinery and equipment, inventory) requires different time periods based on the degree of liquidity and the required level of exposure in the market.
5. Justify the amount of costs. The costs associated with the liquidation and the costs associated with the possession of assets before their sale are distinguished. Liquidation-related costs primarily include commissions for appraisal and law firms, as well as taxes and fees that are paid upon sale. The costs associated with owning assets prior to their sale include the costs of protecting facilities, management costs of maintaining the company's operations until the completion of its liquidation, etc.
6. The realizable property is appraised. Valuation of property to be sold is carried out using all valuation approaches. In practice, the most commonly used approach to property valuation is the comparative approach.
7. The discount rate is determined taking into account the planned implementation period. Moreover, the discount rate can be set for each type of asset being evaluated individually, taking into account liquidity (significant discounts for low liquidity) and the risk of a possible non-sale.
8. A schedule for the sale of property is built, on the basis of which the total proceeds from the sale of current, tangible and intangible assets are determined.
9. The operating profit (loss) of the liquidation period is added (or subtracted).
10. Based on the results of the sale, the accumulated amount of current debt for the period of liquidation (electricity, heating, etc.) is repaid.
Preemptive rights to satisfaction are deducted: severance pay and payments to employees of the enterprise, claims of creditors for obligations secured by a pledge of property of the liquidated enterprise, debt on mandatory payments to the budget and extra-budgetary funds, settlements with other creditors.
At the same time, creditors' claims are satisfied in the order of priority established by Article 64 of the Civil Code of the Russian Federation, in accordance with which the distribution of property of each next priority is carried out after the complete distribution of the property of the previous priority.
11. The final action is the assessment of the liquidation value attributable to the share of owners (shareholders). Federal Law No. 208-FZ of December 26, 1995 “On Joint Stock Companies” (as amended on June 13, 1996) provides for a clear procedure for distributing the remaining amounts.
Thus, the liquidation value of the enterprise is calculated by subtracting from the adjusted value of all assets of the balance sheet the amount of current costs associated with the liquidation of the enterprise, as well as the value of all liabilities.
The development of a calendar schedule for the liquidation of the assets of the enterprise is carried out in order to maximize, as far as possible, the proceeds from the sale of assets to pay off the debt owed to the enterprise.
As a rule, it is assumed that the business of the enterprise is terminated and only the process of liquidation of the enterprise is carried out. liquidation large enterprise takes about two years.
Calculation of the current value of assets is carried out using the method of accumulation of assets, using the balance sheet data of the enterprise on the date of assessment (or on the last reporting date). Checking and adjusting the balance sheet accounts are carried out simultaneously with the inventory of the enterprise's property on the date of assessment. The inventory of the property of the enterprise is carried out in accordance with the methodological guidelines for the inventory of property and financial obligations. Simultaneously with the inventory of the enterprise's property, the market value of the land plot on which it is located and the current value of other assets are calculated.
Adjustment of the current value of assets. When calculating the liquidation value of the enterprise, it is necessary to take into account and subtract from the value of assets the costs associated with their liquidation. These are the administrative costs of maintaining the operation of the enterprise until the completion of its liquidation, commission payments, necessary taxes and fees, severance payments and payments, transportation costs for the sold assets, etc. The proceeds from the sale of assets, net of associated costs, are discounted to the valuation date at an increased discount rate that takes into account the risk associated with this sale and the timing of the cash flow.
After adjusting the balance sheet asset items, it is necessary to adjust the balance sheet liability in terms of long-term and current debt. Particular attention should be paid to the settlement of preferred shares, tax payments, as well as the so-called contingent liabilities, which often arise as a result of ongoing or potential litigation. It is possible that in the course of the analysis of accounts payable it will be possible to negotiate on changing the conditions for repaying the company's debts.
The liquidation value method consists in determining the difference between the value of the property and the costs of liquidation. It turns out that it is most rational to apply this method, provided that the enterprise is threatened with bankruptcy. In other words, this is the moment when the organization stops its operations, sells at auction all its tangible and intangible assets, and also begins to pay off debts and debts on its own obligations.
In the case of calculating the liquidation value, the appraiser needs to take into account and take into account all the expenses that will be incurred during liquidation: commission and administrative costs aimed at maintaining the work of the appraised object until the moment of liquidation, as well as expenses for the services of lawyers and accountants.
There are three types of liquidation:
1. orderly liquidation, which is the sale of the property of the enterprise within a two-year period. main goal this sale is considered to be the receipt of the maximum possible amount from the sale of the assets of the enterprise. For such a long period of time, the organization manages to prepare the property for sale and disseminate information to potential buyers, while the second party to the transaction has enough time to think about the decision and raise funds for the purchase, as well as for its implementation, transportation, etc.
2. forced liquidation is the sale of the company's property as soon as possible. Most often this happens for all assets at the same time and at one auction.
3. liquidation with the termination of the existence of the assets of the enterprise - this is the case when all the assets of the enterprise are subject to destruction in order to make room and build a new enterprise with great potential. With this type of liquidation, the value of the property becomes negative, because the costs are calculated only for the disposal of assets.
In the scientific field, the following stages of business valuation using the liquidation value method are distinguished:
1. justification for the choice of the liquidation value: in accordance with the law, in the event of a forced sale of the company's property (due to its bankruptcy) and due to the short sale deadlines, the appraiser cannot calculate the market value of such an appraisal object, since the sale price of assets will be a forced price for owner. Due to the impossibility of calculating the market value, the appraiser is obliged to justify in writing the choice of another, different type of value;
2. the development of a calendar schedule for the sale of assets is carried out in order to maximize the proceeds from the sale of the company's assets;
3. determination of the current value of assets (excluding liquidation costs): the value of assets is adjusted for the amount of overhead costs for their sale;
4. discounting the adjusted value of the assets being valued (the discount rate should take into account the amount of risks that can be incurred when selling assets);
5. addition (or subtraction) of operating profit (loss);
6. determination of the amount of obligations. The appraiser adjusts the long-term and current debt of the appraised object;
7. calculation of the liquidation value of the enterprise, as the difference between the adjusted current value of the assets and liabilities of the enterprise. The final liquidation value is influenced by the factors that led the business to liquidation. So if the bankruptcy was the result of a low level of management, then the appraiser does not take this factor into account, but if the depreciation was caused by a high degree of depreciation of the company's assets and an unfavorable location, then the level of liquidation value of the appraisal object is significantly reduced.
The liquidation value is determined in case of forced liquidation of the company.
Liquidation value means the net amount that the owner can receive in the liquidation of the company | and the separate sale of its assets.
The liquidation value depends on the nature of the liquidation.
In the event that an orderly liquidation is possible, the sale of assets may take place within a reasonable period of time, which will ensure the highest possible price for each asset. Forced liquidation (assumes that assets are sold off as quickly as possible.
When calculating salvage value, it is important to realistically determine the costs associated with the liquidation of assets. When calculating the salvage value, it is necessary to discount the expected proceeds from the sale of assets at a rate that takes into account the risk associated with liquidation. The base period is the valuation date of the company.
The liquidation value is determined on the basis of the current market value of the company's assets, taking into account the time of their sale according to calendar schedule liquidation of assets (Fig. 5.4).
To calculate the current value of the company's assets, the company's balance sheet data as of the valuation date is used, taking into account the inventory and adjustment of the value of individual assets, the market value of which does not coincide with the book value.
The issue of the best and most efficient use of the liquidated business must first be resolved, which will allow the application of sound market methods.
Rice. 5.4. Scheme for determining the value of the company based on the liquidation value method
night assessment of machines, equipment, vehicles, buildings and structures, intangible assets.
Based on an analysis of the location of the object, the development of infrastructure, the nature and depreciation of real estate, legislative restrictions on the use of property, the most appropriate option was taken to dismantle and sell equipment, vehicles, stocks. Production and warehouse premises can be used by the new owner as a warehouse complex.
The buyer receives the rights to lease the plot together with the rights to real estate (Civil Code of the Russian Federation, Article 271 “The right to use the land plot by the owner of real estate”). Adjustment of balance indicators was made by the appraiser for the following positions (table 5.5).
Table 5.5
Market estimates of liquidated assets, thousand rubles Assets Code
Balan strings
Rynoch station
ST-TH 1 2 3 4 1. Real estate 122 1729 1 199 2. Equipment 122 784 1 150 3. Vehicles 122 900 1212 4. Construction in progress 122 423 229 5. Stocks of sunflower seeds 211 600 728 6. Other stocks of raw materials, materials and similar valuables 211 363 363 7. Inventories finished products 214 40 40 C. Accounts receivable 240 1,590 1,590 E. Cash 260 29 29 Value of liquidated property 6,540 Fixed assets (line 122 of the balance sheet asset) include 12 real estate objects. The book value is RUB 1,729 thousand. The cost of vehicles, machinery and equipment is 1,684 thousand rubles.
As part of real estate objects there are objects of non-industrial purpose, which, in accordance with n.4 Art. 104 federal law"On insolvency (bankruptcy)" are subject to transfer to the authorities free of charge local government. The book value of such facilities amounted to 185 thousand rubles. As a result, the book value of real estate subject to sale amounted to RUB 1,544 thousand. (1729 - 185).
In the process of inventory, technical expertise of real estate, studying market conditions for the sale of such property, the appraiser came to the conclusion that the book value of fixed assets is higher than their market value. Using the full replacement cost method, taking into account all types of depreciation, the appraiser determined the market value of real estate objects - 1,199 thousand rubles.
To assess the market value of machinery and equipment, the appraiser singled out vehicles as more liquid than equipment. (This will be reflected in the asset disposal schedule below.)
The book value of equipment is 784 thousand rubles, and vehicles - 900 thousand rubles. The market value of these assets, calculated on the basis of the market approach, amounted to RUB 1,150 thousand, respectively. and 1,212 thousand rubles.
Construction in progress is estimated at 229 thousand rubles. compared to the book value of 423 thousand rubles. At the same time, the appraiser took into account technical condition structures, wear under the influence of natural and climatic factors.
As part of the reserves of raw materials, material and other similar assets, the appraiser gave a market valuation of sunflower seed reserves, since, according to the appraiser, it was underestimated as of the valuation date: the market value of the reserves is 728 thousand rubles. compared to the book value - 600 thousand rubles. Other inventories of raw materials, material and other similar assets, as well as finished products are valued at their book value.
Adjusted value of property Periods, months Total sp
"SG 15901 SP
SO 5567.5 SCHI SP
cm 1 1 1 1590 1 1918.9 O
SP 99.9 3.0 0.720 SP SE SP
o 5’ o> SP
eight? 3.0 0.764 co
ce 78.6 G "- SP
CM 3.0 10.836 g-*-
about 258.7 with joint venture
SP SP § see 816.6 about
o* 746.6 em SP
?^g cm 816.6 s?
с5 769.2 - SP
CM 1613.6 SE
Real estate 2. Equipment 3. Vehicles 4. Construction in progress 5. Stocks of sunflower seeds to
7. Stocks of finished goods 8. Accounts receivable 9. Cash 10. Total inflow Money 55
from 14. Total current value of liquidated property
As part of receivables, the analysis revealed bad debts of buyers and customers in the amount of 452 thousand rubles. Eventually accounts receivable, which is expected to receive cash within 12 months, is 1,590 thousand rubles. (2043-453).
As a result, the market value of the company's property is 6,540 thousand rubles.
The transition to the liquidation value of the enterprise requires accounting for the costs of selling property, dismantling equipment, transportation costs, costs of maintaining inventories, management costs, the cost of intermediary real estate, appraisal and legal services, taxes, fees, possible discounts in the process of implementation, the cost of holding auctions. The most correct way to calculate the upcoming liquidation costs is on the basis of the estimate. In some cases, you can focus on the accumulated market experience in the sale of this kind of property in similar conditions (table 5.8),
Table 5.8
Liquidation costs for the facility (in % of the market value of assets), thousand rubles Rynoch property.
st-ti Likvidats.
costs 1. Real estate 1199 10 119.9 2. Equipment 1150 15 172.5 3. Vehicles 1 212 7 84.8 4. Construction in progress 229 12 27.5 5. Stocks of sunflower seeds 728 2 14.6 6. Others stocks of raw materials 363 5 18.1 7. Stocks of finished products 40 5 2.0 8. Accounts receivable 1590 5 79.5 9. Cash 29 - - Administrative expenses for the liquidation of the enterprise, according to the calculation, amount to 28 thousand rubles. per month. Severance pay to employees totaled 51.8 thousand rubles.
The schedule for the sale of the company's assets is drawn up taking into account the degree of their liquidity in the actual economic conditions. In addition, legal restrictions on the sale of property of a liquidated enterprise should be taken into account (table 5.9),
Table 5.9 Schedule for the sale of the company's assets Property, Implementation period,
months 1, Real estate 12 2. Equipment 6 3. Vehicles 3 4. Construction in progress 12 5. Stocks of sunflower seeds 1 6. Other stocks of raw materials 3 7. Stocks of finished products 1 . 8. Accounts receivable 12 9. Cash 1 The schedule for the sale of assets allows you to determine the current market value of the property being sold, taking into account the timing of receipt of funds from the sale of property. For this purpose, it is necessary to adjust the amount of cash receipts using the mechanism of discounting proceeds from the sale of property. In this case, we will proceed from the assumption that for the entire period of sale of individual groups of assets, income will be formed evenly by months, and that funds will be received at the end of the month. An exception is the sale of construction in progress.
To calculate the discount rate, a cumulative construction method was adopted, which allows taking into account all the risks of investments in realizable property, risks associated with management, etc. In this example, to calculate the discounted cash flows A discount rate of 3% has been adopted.
The calculation of discounted cash flows (RC) will be made according to the formula:
(1 + k)t (1 + k)t
where RU - monthly flows cash income from the sale of property, in accordance with the established schedule;
r - monthly discount rate; m - the number of discounting periods per year, month (m = 12).
Liquidation costs also require adjustment, but the process will be reversed: it is necessary to determine the increasing cost of cash to maintain costs at a level sufficient to liquidate the enterprise. Adjusted cash outflow (CU) is determined by the formula:
py>m = py(1 + r)m,
where (1 + r Y "- camping factor; r - interest on capital;
RU - current cash flow;
t - the number of periods for the sale of property, months. (771 = 12).
Based on the adjustments made in tables 5.6, 5.7, we can determine the liquidation value of the enterprise, which is 4,555.3 thousand rubles. (5,567.5 - 1,012.2).
The salvage value method is the main and the only one possible for use in the liquidation of a business.
Liquidation value is the value of assets at which they can be sold (together or in parts), less the costs associated with the liquidation procedure and the repayment of liabilities.
As the name of the method implies, it is focused on application in the liquidation of a business. In addition to this case, the liquidation value method can be used by creditors to predict the consequences of a possible bankruptcy.
The methodology for calculating the value of a business using liquidation value is similar to the methodology for net assets. However, when applying the liquidation value of a business method, the value of net assets is reduced by the costs associated with the liquidation of the business and the repayment of its obligations.
As a result, the liquidation value of a business can be calculated as the difference between the net asset value calculated by the appropriate method within the property approach and the costs associated with the liquidation of the business and the repayment of liabilities, namely:
C lik \u003d CHA - R lik - O biz, (7)
With a face‒ liquidation value of the business;
CA‒ value of net assets;
R lik‒ expenses associated with the liquidation of a business;
About biz‒ business liabilities to be repaid.
The main reasons and conditions for applying the salvage value are as follows:
1. economic benefits from continuing the business are less than the amount received from the sale of business assets;
2. by decision of the judicial authorities to terminate the business;
3. conflicts with minority shareholders who insist on the termination of business must be resolved;
There are two ways to liquidate:
1. ordered liquidation (Orderly Liquidation);
2. forced liquidation (Forced Liquidation).
Orderly Liquidation is possible under the following conditions:
Ø availability of sufficient time to carry out the liquidation of the business;
Ø the presence of buyers who are ready to buy assets that are an integral part of the business;
Ø business assets are not under arrest or pledged;
Ø The potential buyer takes into account the costs associated with moving assets.
Forced liquidation is carried out, as a rule, by decision of the judicial authorities. Therefore, compulsory liquidation is carried out under the following conditions:
Ø time for business liquidation is limited;
Ø the sale of business assets is carried out through an auction;
Ø The price that can be obtained "immediately" in the current economic conditions is less than the market price, taking into account the exposure period.
Questions for self-control of mastering the topic
1. Conditions for the application of the property method in business valuation.
2. The order and sequence of application of the net asset method.
3. The procedure and sequence for assessing the obligations of the assessed business.
4. The sequence of application of the net asset method.
5. The sequence of application of the excess profit method.
6. The sequence of application of the salvage value method.
Topic 4. Comparative approach to business valuation
Methodology of the comparative approach in business valuation
The economic content of the comparative approach lies in the fact that business valuation is carried out on the basis of objects similar to the object of valuation. However, at the same time, the most important requirement is imposed on the analogue object - it must be sold and, therefore, the sale price will act as a guideline for the value of the business being valued.
For an analogue enterprise, the ratio between the sale price and the most important financial performance. This ratio is called the estimated multiplier. By multiplying the value of the multiplier by a similar financial indicator of the company being valued, the value of the business being valued is calculated.
Example.
When evaluating a business, the appraiser, using a comparative approach, identified a similar business that was sold 3 months ago. The sale price was 300 million rubles. In addition, the appraiser learned that the sold business brought in 30 million rubles annually. net profit. Accordingly, the “Price/Earnings” multiplier is equal to 10.
When studying the business being valued by the appraiser, it was found that it annually brings 18 million rubles.
Thus, the value of the valued business is equal to:
10 18 million rub. = 180 million rubles.
Depending on the goals and conditions of the assessment, the comparative approach involves the use of three methods:
1.Peer company method or capi market method t ala – is used to estimate the value of one share or non-controlling shareholdings.
2.Deal method - used to evaluate the entire value of the enterprise or controlling stakes.
3.Industry coefficient method - based on the use of recommended ratios between the sale price and certain financial indicators. Industry coefficients are calculated on the basis of long-term statistical observations for small forms of business with a narrow range of products or services. The method of industry coefficients in the Russian Federation is not used due to lack of information.
The evaluation procedure using a comparative approach includes the following steps:
1. collection of information necessary for the assessment.
2. compiling a list of analogue enterprises.
3. the financial analysis of the assessed enterprise and enterprises of analogues.
4. calculation of estimated multipliers.
5. derivation of the average value within each group of multipliers.
6. determination of the preliminary cost of the enterprise being valued.
7. introduction of final amendments.
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