How and why liquidation value is calculated. Formula for calculating liquidation value. Western approaches to identifying liquidation value

Calculation of liquidation value is relevant when it is necessary to sell the assets of an enterprise in a short time. Allows you to quickly sell objects at optimal price. The cost must be attractive to potential clients, but not too low. Determining it will require taking into account many factors.

What is salvage value?

Liquidation value– this is the price of the enterprise’s assets, from which sales costs are subtracted.

The decrease in value is due to the need to sell objects in a short time, which arose as a result of the following factors:

companies.
The need for settlements with creditors.
Sale of the enterprise.
Optimization of production capacity.
The need to purchase new equipment to replace outdated ones.
Changing the direction of the enterprise's activities.

Expenses for commission fees, transportation, advertising, and storage are deducted from the real value of assets. A discount is provided to quickly attract buyers. As a result of all deductions, the value of the assets decreases. The market price for properties is almost always higher than the liquidation value.

IMPORTANT! Selling at liquidation value may be beneficial to the enterprise in financially. These cases are typical when there is an acute demand for the asset being sold and an increase in prices for it. In such a situation, the company can sell the property at a cost that exceeds standard prices.

Types of liquidation value

Liquidation value may reflect various indicators. It is divided into the following types:

Short-term or forced. Formed as a result of urgent sale of objects. Due to the tight deadlines, the cost is reduced to a minimum. This indicator may be required when calculating debts that cannot be deferred.
Medium term. A relatively long time has been allocated for the sale of assets. The manager's task is to sell objects at a cost close to the market price. The possibility of deferring the sale allows you to competently carry out an advertising campaign and find buyers.
Long-term. Long-term salvage value is determined when assets need to be written off. IN in this case the enterprise will not receive any funds for the objects.

Typically, liquidation value refers to prices for the sale of assets. The price reduction will depend on two variables: the circumstances of the implementation and the professionalism of the manager.

Procedure for assessing liquidation value

Correct determination of drugs allows you to reduce company costs. In favorable circumstances, the sale of assets can even bring profit. Cost determination can be divided into the following stages:

Analysis of information obtained from accounting. This information allows you to determine the book value of assets. As part of this stage, the availability of the property being sold must be verified. The real market value of the objects is revealed.
Determination of sales costs. It is necessary to establish a list of likely expenses during the sale. These include spending on advertising, posting ads, and searching for a client. You also need to consider the cost of storing assets. At the second stage, the feasibility of the sale is determined. The sale of assets is not always best option. If the costs exceed the salvage value, it is easier to destroy the object.
Development of a liquidation schedule for each facility. A separate schedule for each asset is necessary because some objects are quite easy to sell, while selling others will take a long time to find a buyer.
Determining the amount of reduction in value. First of all, the cost is reduced for those objects that are difficult to implement. An attractive discount plays a role in quickly attracting customers. Assets for which there is acute demand can be sold at a price close to the market value.
Sales organization. Actions are taken aimed directly at the sale of property. These may include advertising campaigns and customer searches. If the sale is found to be inappropriate, the property is destroyed.

It is recommended to place a bet not on quick sale, but to maximize profit from sales. Typically, the manager is looking for the maximum price at which buyers will appear in the near future. Its specific size is determined by the type of asset. For example, it is possible to sell new equipment, for which there is acute demand, at market value. With outdated technology, such a number will not work.

Formula for calculations

There are several formulas for determining liquidation value. The most relevant is the one that allows you to bring prices closer to market prices:

LP = Market value x (1 - Coefficient for forced sale)

The coefficient can be 0.1 - 0.5 or 10 - 50%. Its exact value is determined depending on the market price of the asset. The coefficient is established as a result of an expert assessment. It depends on the following factors:

expected implementation timeframe;
depreciation of equipment and its type;
market valuation of the asset;
general situation in the required market segment.

If it is impossible to conduct an expert assessment, the coefficient is set at the lower limit. That is, it will be 0.5.

Calculation examples

The company urgently sells equipment for settlements with creditors. Its market value is 50,000 rubles. The forced sales coefficient was not calculated, it was taken as a basis bottom bar. The drug calculation will be as follows:

50,000 multiplied by (1 - 0.5)

As a result, we receive a liquidation value equal to 25 thousand rubles.

IMPORTANT! The coefficient depends not only on the characteristics of the assets, but also on a number of other factors: timing of sale, level of demand. The more opportunities there are for the implementation of an object, the higher the coefficient will be. As the ratio increases, the liquidation value also increases.

Nuances when determining drugs

When establishing the liquidation value, two main errors are observed: overestimating or underestimating the price. In the first case, the asset will not be purchased, which will lead to problems. For example, the inability to pay off debts. In the second case, the company will not receive the profit that it could have received.

So.
Liquidation value is the valuation of an asset for sale within a short period of time. Its definition is divided into a number of stages, during which the question of the feasibility of implementation is resolved. The LP is calculated based on a formula that includes the market value of assets. The assessment results depend on many factors, including specifications object, demand for it, time allotted for implementation.

Liquidation value is the value of all assets that can be sold in the event of bankruptcy of the enterprise.

The sale of assets is carried out in order to repay, in whole or in part, all obligations to creditors.

Usually, possible bankruptcy becomes known long before this decision is made and all necessary procedures begin, so entrepreneurs have time to sell part of their assets at better prices and pay off part of their liabilities.

Estimation of liquidation value

Cost calculation formula No. 1

There are two ways to calculate liquidation value. In the case when the enterprise ceases to make a profit and in the case when it continues to make a profit.

The formula for calculating liquidation value is quite simple:

(Price/earnings) or as it is usually written in textbooks (P/E).

For calculations, data is taken for the quarter of operation of the enterprise and this data must be reliable. In some cases, additional correction factors are introduced. It should be borne in mind that the exact liquidation value can only be found out after the company is declared bankrupt and its property goes under the hammer.

That is, you calculate the likely amount that you could receive if assets were sold at a certain point in time.

Therefore, the following formula is usually used to calculate liquidation value:

Sp = R f × (1 – K p) × (1 – K v).

Where Sp- liquidation value;
Russia– market capitalization, which is expressed in absolute values;
Kv And KP– increasing and decreasing assets, respectively, both depend on the situation and the time required for the reorganization or liquidation of the enterprise.

Formula for calculating cost No. 2

The second method of calculating liquidation value implies that the company continues to make a profit and therefore this fact must be taken into account when calculating. In this case, the amount of debt obligations is determined, since without this it is impossible to determine the real value of assets.

The liquidation value in this case is determined quite simply: We subtract the company's debt from the total value of the property. In this case, when calculating the liquidation value, auxiliary coefficients are not used, but interest rates on loans must be taken into account.

To calculate the accumulated debt, use the formula for calculating interest:

FV=P(1+n)k– for a complex bet;

FV=P(1+nk)– for simple;

Where F.V.– the amount of debt with interest;
n– interest rate;
k– period;
P– amount of accounts payable.

When determining accounts payable, debts paid should also be taken into account. If there is an overdue debt, it should be included in the final amount along with penalties and fines.

When should balance sheet information be clarified and adjusted?

The process of liquidating a company takes a long time. As a result, based on the procedures performed, a liquidation balance sheet is compiled.

The purpose of the liquidation balance sheet is:

Show incurred by the enterprise losses during liquidation or reorganization
Securing creditors and relevant government bodies reliable information about the economic condition of the company.

As a rule, before the final liquidation balance sheet, interim balance sheets are first submitted. In them, data on the state of liabilities and assets is adjusted throughout the entire period while the liquidation of the enterprise lasts.

Before the liquidation balance sheet is submitted to the tax office, it is necessary to make appropriate entries and adjustments.

You will need to indicate:

All costs and losses losses incurred during the liquidation of property;
Revenue received from the sale of assets;
Information is recorded in the balance sheet about the financial condition of the enterprise, its property and liabilities at the time of liquidation of the balance sheet.

Then the balance is approved by the founders or participants of the competition board. After the decision to liquidate the enterprise is finally received, that is, the enterprise will be removed from the state register of legal entities, the final balance sheet is submitted to the tax office.

The main essence of the concept

The essence of the liquidation value of assets is that that these assets are the collateral of the enterprise. It takes out a bank loan against these assets and, in the event of bankruptcy, pays off all its obligations with the same property. That is, if an enterprise does not make a profit and is on the verge of bankruptcy, then its assets automatically turn into liabilities.

It is important to consider that banks usually issue loans based on liquidation value, and the liquidation value is calculated based on the market value. This is due to the fact that when assets are sold in the event of bankruptcy, their price will be significantly lower than their original cost.

Since in this case the assets will be sold under the hammer, often hastily and with large losses. Therefore, lenders are looking for insurance.

Economic definition of the concept

The economic definition of the concept is that liquidation value acquires its significance when there is a need to sell the property of an enterprise in a short time. But it is not always associated with the bankruptcy of the enterprise.

Very often this concept also refers to the sale of obsolete or unnecessary equipment. The proceeds are used to pay off obligations to creditors. The remainder can be used to pay dividends or invested in other assets.

In the global economy, the concept of “liquidation value” has a clear connection with the probability of bankruptcy.

The essence of this approach is simple: in any case, sooner or later, the company will be declared bankrupt and all property will be sold off. There are two approaches to the sale of assets in this case: urgent liquidation and orderly liquidation.

A quick liquidation occurs when creditors demand immediate repayment of all obligations. The reasons for such claims may vary, but it is common that in such cases the assets are sold at a reduced value. Sales and auctions are organized.

An orderly liquidation occurs within a reasonable time frame. In this case, the liquidation value can be as close as possible to the market value.

Typically, such liquidation occurs in two cases:

After paying off all debts;
In cases where probable bankruptcy becomes known in advance, before the commencement of the liquidation procedure of the enterprise.

Accounting assets and liabilities

As you know, all transactions, including the sale of property at liquidation value, must be documented in financial statements enterprises. All funds of the enterprise are divided into assets, that is, on property and liabilities - the sources of formation of this property.

Due to the fact that the capital structure does not depend on decisions made regarding investment policy, the organization cannot change the market value of its assets. Their value does not depend on the state of the enterprise's liabilities.

Therefore, when identifying liquidation value, economists often pay more attention to balance sheet assets. After all, it is through them that obligations to creditors will be repaid.

Western approaches to identifying liquidation value

In Western countries, the approach to identifying liquidation value differs significantly from the Russian one. This difference, ultimately, determines the entire policy of Western entrepreneurs regarding the identification of the liquidation value of an enterprise.

It is believed that after the sale of assets and the repayment of all existing liabilities, the property ceases to be valued at its liquidation value, and begins to be valued at its market value. The remainder of the property is sold, and the funds received are distributed among shareholders.

In the modern Russian market, liquidation value is becoming increasingly important. It is usually used to work with bankrupt enterprises or federally funded long-term construction projects. The process of assessing property is especially important in a crisis situation in the country.

Types of cost

Each product is characterized by a cost. In standard conditions, the market one appears, which is considered the basis for assessing the object. When deviating from it characteristic features other types of value arise.

Market price is the price of an object that is considered the most probable. The subject of valuation is sold in a competitive market open market. The parties are informed of the necessary information about the object. The price is not affected by extraordinary reasons, which include:

There are no obligations imposed on the parties to the transaction: one must sell, the other must buy.
The property is put up for public auction.
The price of a product is expressed in monetary terms.
The transaction amount seems adequate, there is no compulsion to buy or sell.
Both parties to the transaction have information about its subject and act in their own interests.

Failure to comply with one of the described market value criteria leads to the appearance of other types. This fact requires a clear definition of the most adequate type in any specific situation. Investment value arises when property is acquired for a distinct purpose. This is both a purely commercial desire to make a profit in the future, and non-economic reasons, for example, getting pleasure from an old painting. Liquidation value is required when extraordinary circumstances arise and the price of the property is undervalued.

Salvage value - what is it?

The concept of liquidation value implies money supply, which can be recovered upon liquidation of assets. These include property that belongs to an individual or legal entity. Accordingly, this is the real amount that the owner expects when selling the property in a short time. There is not yet a sufficient statistical base for the purchase and sale of such objects on the Russian market, so the market type of valuation is used.

At the same time, the residual value of the object is calculated. It represents a value equal to the economically valid value, taking into account the depreciation of the property. To get the correct result, you need to subtract accumulated depreciation from the original price. Such data is taken into account when calculating the liquidation value of property put up for auction under forced circumstances.

When does it occur?

An enterprise is assessed using the liquidation value method when it becomes necessary to pay off existing debts to creditors. The sale of produced goods is not able to cover the debts and forces the owner to sell off assets to pay them off. The time factor becomes decisive in this case. The faster assets are sold, the sooner debts will be repaid.

The timing of the transaction is determined individually for each case. Liquidation legal entity carried out in both forced and voluntary forms. In the event of a voluntary sale of property, it becomes possible to draw up an acceptable implementation schedule and plan your actions taking into account specific details. The bankruptcy estate (the debtor's property) is put up for auction within the established time frame. Liquidation value is a guarantee to creditors that the debt will be repaid. The property turns into collateral. It is important for the lender to know when the settlement will be made and at what price the sale will take place. Sometimes the liquidation value is called collateral.

In case of forced liquidation, the time frame is sharply reduced. In this case, the assessment of the liquidation value of the property is carried out on the basis of legislation Russian Federation. Property objects are sold within two months after they are seized. Both voluntary and forced liquidation lead to a decrease in the value of the property; the price becomes less than the market price. For the seller this becomes a loss-making event, but for the buyer it becomes profitable.

Evaluation factors

The liquidation value of the subject property depends on the compulsion to put up property for auction. This is the main factor influencing the value in the absence of market agreements. To accurately calculate the liquidation value, other reasons are taken into account:

The exhibition period is the time allotted for the sale of an object. The shorter the auction period, the lower the price of the property.
The economic situation in the country at the time of the auction. The objective state of the market may adversely affect the valuation of the property.
The attractiveness of a property on the real estate market depends on its individual characteristics and market demand for the specific type being exhibited.

The liquidation value of preferred shares is located in a separate place. Their owners receive compensation for losses in the first place upon termination of the organization's activities. They also enjoy the priority right to pay the amount of funds that corresponds to hard money or as a percentage of the par value of the share.

Assessment methods

The Russian real estate market uses unique methods for calculating liquidation value when evaluating an object.

For direct method real estate valuations must be used comparative analysis sales of similar objects in this market sector. This is required to examine recent purchase and sale transactions in a particular location for similar items. Then a direct dependence of the liquidation value of the object on the main factors is established.

The indirect method of real estate valuation is based on the actual market value of real estate in a specific period of time. The price is adjusted by the coefficient (adjustment) of the influence of the main factors forcing the property to be put up for auction. This method does not depend on subjective opinions, as it is calculated using a formula.

Calculation formula

To avoid intuitive pricing of a property, it is best to use a mathematical method. The formula provides irrefutable accuracy in the question of how to find the liquidation value.

So, the formula for an accurate calculation: liquidation value is the market value multiplied by the adjustment factor. Let's clarify the last concept. The adjustment coefficient is an indicator of the forced putting up of an item for auction. The range of this value is from one to zero. There are no mathematical indicators to calculate it. The appraiser, based on personal experience, knowledge and intuition, assigns a correction factor (forced correction). Russian reality puts it at a value from one tenth to three tenths. This respectively ranges from ten to thirty percent of the market value of the property. Such indicators appear as a result of failed trades. Modern realities in the real estate market they imply an adjustment factor of five tenths or more. This value appeared as a result of a study of the factors of forced liquidation: methods of sale and costs for it, exposure period, investment risks. Of the components of the formula, the most accurate is market value.

Valuing intangible assets is somewhat difficult. Mathematical formula is not suitable, an individual calculation is required for each case. This is due to the difficulties in determining the quantitative results of using an object to generate income. The costing method is considered accurate. It is based on calculating the costs of developing and creating a legal framework for intangible assets. The method is used to evaluate the results of design work and scientific research. When applying the costing method, it is taken into account that in order to transform the results research activities Income-generating implementation goes through several stages. First you need to complete the development work. Based on its results, design a product, manufacture trial version. If there are indications for mass production, and it is in demand by consumers, then an enterprise is built for its production. Only after mastering the production capacity do they begin to manufacture and sell the new product. To promote a product, you will need to pursue a policy of conquering the market. Each stage involves material costs and, importantly, has a time frame.

Cases of formation of liquidation value

Examples of converting market value to liquidation value are divided into three typical types:

Cancellation of an organization is most often a result of bankruptcy.
Sale of collateral.
Forced sale of other property.

Liquidation of an organization or enterprise leads to the formation of a schedule for the sale of property to pay off existing debt. There are cases when the final amount of income from the sale of property cannot cover all debts. The timing of pre-sale measures and the auction itself is limited. The liquidation value of the valuation object depends on the presence of a temporary factor. This, if all other conditions are equal, plays a decisive role.

In each individual case, the duration of the liquidation period is determined individually. It is important to consider that such a decision can be made voluntarily. Then there arises more options to solve the problem, there is time to develop and implement effective plan liquidation of the enterprise. The forced sale of property to pay creditors is carried out after a decision on bankruptcy proceedings based on the results of external administration. The created competitive base should be sold at open auction. The timing of such an event is extremely limited. Owners may wish to consider carrying out a voluntary liquidation before forcing an involuntary liquidation.

Selling a collateral item feels like being out of touch with reality. In this case, the estimated liquidation value is required to determine the lower limit of the loan, to secure which it is necessary to sell the pledged property. This does not involve the actual sale of the property. But the lender needs to know at what price the collateral can be sold within a limited time frame in case of non-repayment of the amount issued. Time constraints and forced sale allow us to call this value the liquidation value. Although in some sources it is called collateral and is classified as a separate category.

Forced sale of property also requires calculation of liquidation value due to limited exposure time. Property can be sold on one's own initiative (voluntary sale) or under legal duress (forced sale). In the second case, the period of exposure of the arrested person to judicial procedure property lasts no more than two months from the date of seizure.

The impact of the crisis on the valuation of the property

Economic market instability affects the liquidation value of real estate, often negatively. The crisis is exacerbating this non-negative impact. The mutual influence is due to a number of reasons:

There are insufficient financial resources entering the economic market;
Small secondary housing properties are in great demand;
A disruption in banking lending is leading to a reduction in demand for larger real estate.

The crisis makes adjustments to the activities of appraisers and requires owners to be more attentive. To obtain an adequate price, it is better to use both methods of determining the liquidation value of an object. Under current conditions, you should not rely only on the experience of professionals. The peculiarities of estimating liquidation value during a crisis are that each method brings its own advantages. Direct allows you to analyze the state of the real estate market and similar purchase and sale transactions. The conclusion will become the basis for the indirect method. He will take into account the actual market value real estate, will take into account the cadastral valuation and set an adjustment factor adequate to the necessity.

Only harmonious combination two approaches, accounting objective reasons and subjective factors will allow you to achieve maximum effect.

Conclusion: the peculiarities of assessing liquidation value on the Russian market lie in its imperfection and the relevance of its application. Empirical information and intuitive perception of specialists underlie assessment activities. To obtain an accurate result, you must use all available methods.

Methods for calculating the cost of fixed assets

IN practical activities there is a need to calculate the liquidation value of fixed assets. There are several opinions regarding the explanation of this concept. The first is the price useful waste, which will be received after the sale of the object, included in the final amount. The second is the difference between the value of an object after its use is completed and the cost of its disposal. There is a third opinion: with complete depreciation of the product and recognition of its unsuitability for subsequent use, this value will be equal to the difference between the price of useful waste (firewood, scrap metal, brick, etc.) and the cost of destroying the item.

Thus, the liquidation value of the fixed assets is calculated using a special formula. Let’s say the object was initially valued at a million rubles, and was used for ten years. The market value of similar equipment for the same period of use has decreased to three hundred thousand. The estimated cost of canceling it is approximately ninety thousand. Therefore, three hundred minus ninety equals two hundred ten thousand rubles. This amount will constitute the organization’s income from the sale of useful waste after the cancellation of fixed assets.

It is important to note that when making a decision on liquidation at the end of the asset's useful life, certain criteria must be taken into account. These include:

complexity of dismantling work;
the amount of expenses for the destruction of fixed assets;
wear and tear of residues, both physical and moral;
price dynamics for Construction Materials, metal, spare parts and more;
the ability to use leftovers in your own activities or sell them;
Conducting a reliable assessment of sold balances.

The termination of the very existence of an enterprise as a legal entity leads to the mandatory preparation of a reporting accounting document. The value of the liquidation balance sheet characterizes the sources of funds and their amount at the time of closure of the organization. During the allotted period for the cancellation of the enterprise, obligations to banks and creditors must be repaid. The state of the organization’s settlements after the liquidation period shows the actual financial position.

Difficulties in assessment

The calculation of liquidation value is accompanied by some problems. The main one is the time limit for selling the property. Registration of ownership of a property requires time and painstaking verification of documents. The second problem is the reduction in the number of buyers.

Reassessment of the profitability of an enterprise can take place in three ways.

The income method takes into account the receipt of benefits in the near and distant future.
The comparative method is based on the real price of property sold on the open market.
The costly type implies the allowable costs that the owner will incur during its acquisition and subsequent reconstruction.

The relevance of the methods affects the establishment of the liquidation value of the enterprise. The limited time period does not allow potential buyers to be informed about the advantages of the assets. To finalize the rate, it is necessary to analyze the results of all evaluation approaches.

Liquidation value is a monetary amount in the form of the difference between the income from the liquidation of a property and the costs of its implementation. This is the price that the seller has to agree to when forced to sell the property in a limited period of time, which does not allow a significant number of potential buyers to familiarize themselves with the property and the terms of sale.

When determining the liquidation value of the valuation object, an estimated value is determined that reflects the most likely price at which this valuation object can be alienated during the period of exposure of the valuation object, which is less than the typical exposure period for market conditions, in conditions where the seller is forced to make a transaction to alienate the property.

When determining the liquidation value, in contrast to determining the market value, the influence of extraordinary circumstances forcing the seller to sell the subject property on terms that do not correspond to market conditions is taken into account.

It is well known that the same property can have different values depending on the purpose of the valuation. What is liquidation value, how does it differ from other types of estimated values, and what are the features of its calculation - the issues that are the subject of consideration in this section. The concept of liquidation value is set out by many authors in the currently available literature on property valuation. For example, according to Professor S. Pratt, liquidation value is “the net amount of money that the owner of an enterprise can receive upon liquidation of the enterprise and the separate sale of its assets.”

G.S. Harrison in textbook“Real Estate Appraisal” defines liquidation value as follows: “Liquidation value represents the price that the owner would be forced to accept if the property were sold at a time less than what is reasonably acceptable for market exposure.”

International Valuation Standards 2 (Valuation Bases Other Than Market Value), which define values other than market value, interpret liquidation value as follows: “Liquidation value, or forced sale value, is the amount of money that can actually be obtained from the sale of property at time frames too short to allow adequate marketing as determined by Market Value. In some states, forced sale situations may include those involving an involuntary seller and a buyer or buyers who are aware of the seller's hardship."

Based on the above, we can conclude that property can be valued on a basis different from the market value (liquidation value) and taking into account the non-market nature of the transaction.

The non-market nature of the transaction is manifested, as a rule, in two points:

1. forced (involuntary) sale of property for various reasons;

2. in reducing the time of market exposure of the property being sold on the market.

At the same time, the estimated selling price of the property, due to atypical sales conditions for the market, will undoubtedly be lower than the market price. Predicting this price is very difficult due to the nature and extent of the subjective and opportunistic assumptions required to formulate a judgment of this nature.

Depending on the urgency of the sale of assets, the liquidation value is divided into ordered liquidation value and forced (urgent) liquidation value.

Ordered liquidation value is an estimated value at current prices, representing the estimated proceeds from open sale property for a certain period of time, during which the seller has the opportunity to take appropriate measures to increase the liquidity and value of assets ( Maintenance, presentation, etc.), minus sales costs. The decision to liquidate is made by the owner if it is more expedient to sell the asset if it is redundant or unprofitable. Since in this case there are no strict restrictions on the time of sale, the period of exposure of the asset being sold on the market is close to the period of market exposure, and the liquidation value itself is close to the market value.

Forced (urgent) liquidation value is an estimated value in current prices, representing the expected proceeds from the open sale of property urgently, i.e. without taking appropriate measures to increase liquidity and asset value, minus sales costs. In this case, there are strict restrictions on sales time dictated by the buyer. The period of exposure of the asset being sold on the market may be much less than the market exposure.

Thus, the sales value (liquidation value) in both options will be lower than the market value. The amount of decrease in market value caused by the above factors is determined by the liquidation discount. In the case of an orderly liquidation, the amount of this discount will be less than in the case of an urgent liquidation.

1. Goals, functions and tasks of calculating liquidation value

The goals and methodology for calculating the liquidation value are determined by the situation in which the owner of the property being valued finds himself.

An assessment of the liquidation value of property is necessary in the following cases:

· upon liquidation of an enterprise;

· when developing a plan for repaying the debts of a debtor enterprise that is under threat of bankruptcy;

· when financing the reorganization of an enterprise;

· when assessing the value of excess assets of an enterprise;

· during the reorganization of an enterprise carried out without judicial trial;

· when analyzing and identifying opportunities for separating individual production facilities of an enterprise into economically independent organizations;

· when determining the value of the property acting as collateral and the possible need to sell it in the event of impossibility of repaying the loan.

A positive solution to the above situations depends on many factors, primarily such as the value and degree of liquidity of the property, factors of supply and demand prevailing at the valuation date.

2. Technology for carrying out work to calculate liquidation value

The main task of the appraiser is precise definition subtype of liquidation value in accordance with the tasks set by the Customer. To eliminate possible confusion between the concepts of market value and non-market value base in the assessment process, the Appraiser must adhere to the following assessment algorithm:

1. Identify the property being valued. Identification implies establishing a correspondence between the available documentation for the objects of assessment and their actual presence and condition.

2. Identify the rights associated with the property being valued. Description of ownership includes general description property and a list of title documents that secure the rights of the owner, for example, on the basis of a purchase and sale agreement for the property of an enterprise or a certificate of ownership issued by the relevant authorized government agencies.

3. Identify the purpose and function of evaluation. Identification of the purpose and function of the assessment implies a reasoned determination of the type of estimated value and the method of using its results in accordance with the objectives of the assessment.

4. Set an effective valuation date. The effective date of valuation, as a rule, coincides with the date of inspection of the property being valued.

5. Research the property being assessed. At this stage, the property being assessed is inspected and its technical condition is described. Analysis in progress possible approaches to calculate the market value, which is the basis on which valuation bases can be determined that differ from the market value (liquidation value, mortgage value, insurance value, etc.).

6. Calculation of the market value of the property being assessed. According to Article 3 of the Federal Law “On Valuation Activities in the Russian Federation” “... the market value of the valuation object is understood as the most probable price at which this valuation object can be sold on the open market in a competitive environment...”.

7. In accordance with the stated purpose and function of the assessment, make justifications for calculating the appropriate discounts from the market value, including sales costs. Sales costs include the costs of maintaining the property, bringing it into marketable condition, commissions to realtors, appraisers, etc. In this case, it is necessary to identify all special circumstances and restrictions due to the current situation.

8. In the case of calculating the ordered liquidation value, the assessment results must be adjusted in accordance with the developed plan for the sale of liquidated assets. When calculating the liquidation value, the proceeds from the sale of assets, net of associated costs, are discounted to the valuation date at a discount rate that takes into account the risk associated with this sale.

The sale of various assets can be carried out at different times depending on their degree of liquidity. Liquidity refers to the property of assets, expressed in their rapid sale, i.e. circulation into cash.

Movable property, by virtue of its definition, is generally more liquid than immovable property. Equipment, machines and mechanisms can be sold in a shorter period of time. Other assets, such as inventories, raw materials and materials, can be sold immediately after the decision to sell the assets is made.

The technological sequence of work on calculating the ordered liquidation value of an enterprise’s assets is most fully presented in the materials of the Institute’s seminars economic development World Bank. It includes the following steps:

· development of a calendar schedule for liquidation of enterprise assets;

· calculation of the current value of assets taking into account the costs of their liquidation;

· determination of the amount of the enterprise's liabilities;

· subtracting the amount of the enterprise's liabilities from the current adjusted value of assets.

Unfortunately, at present there is no well-founded methodology for calculating liquidation discounts and, in general, liquidation value. Analyzing the approaches to calculating liquidation discounts proposed by some authors, we can conclude that these approaches are mostly of an empirical nature, determined by the opinion of a particular specialist.

It is known that the market value determined by the appraiser presupposes a certain period of market exposure, during which the appraised property can be sold at the specified market value. As the period of market exposure decreases, the likelihood of selling an asset at market value decreases. The urgency of the sale of the asset should determine an adequate reduction in the level of market value. Thus, the difference between the market and liquidation value is determined, first of all, by the required time for the sale of property, not to mention the very factor of forced sale. The urgency of implementation is determined by the ratio of the required time of sale (exposure) - Ttr to the market exposure period - Ttr established on the valuation date - for a given type of property.

Thus, the liquidation value can be determined by the market value adjusted for the liquidation discount. The liquidation discount itself (L) can be represented as the product of the function of exposure time f(Te) and the price elasticity of demand, taking into account the forced sale factor f(E):

Liquidation discount

(L) = f(Te)*f(E).

The function f(Te) can be calculated using the following formula:

f(Te)=1/(1+i)(Tre -Tmp)

where (Tre-Ttr) is the number of interest accrual periods (months) for the discounting period, determined by the time of the required sale (exposure); i -- the corresponding (Tre-Ttr) discount rate.

Example 1. An appraiser determined the market value (MC) of equipment to be $50,000 using various valuation approaches. Using the cumulative construction method, the capitalization rate (R) was determined to be 35%, while the rate of return was 10% (annualized). As you know, R consists of two components - the rate of return (i) and the rate of return (RR). Considering NV as a component of the capitalization rate, which can be sacrificed when T tends to 0, formula (1) can be presented as follows:

f(Te)= 1/(1+ R - HB)(Tre - Tmp)

Market exposure (Tre) is 3 months and required exposure (Ttr) is 1 month.

f(Te)=1/(1 + 0.029 - 0.008)(3 - 1) =0.959

Liquidation value

(LS) = RS*f(Te) = 50000*0.959 = $47964

Liquidation discount = 50,000 - 47,964 = $2,036

The dependence of the cost on the exposure period can also be expressed by the following formula:

LS = RS*(1 -- exp(-i*Ttr))/(1 -- exp(-i*Ttr)), (2)

Example 2. Based on the data from Example 1, we will calculate the liquidation value using formula (2):

LS = 50000 * (1 -- exp(-0.029*1))/(1 -- exp(-0.029*3)) = $17470

Liquidation discount = 50,000 - 17,470 = $32,530

Comparing the obtained values of liquidation value in Examples 1 and 2, we can conclude that formula (1) tends to clearly significantly overestimate the result at Ttr<<Трэ, а формула (2) -- напротив, к занижению. К тому же при Ттр=0, стоимость, рассчитанная с помощью модели 2, равна нулю, что явно не логично. Для устранения этих негативных тенденций в качестве итоговой величины ликвидационной стоимости можно принять средневзвешенную величину по результатам использования моделей 1 и 2:

Liquidation value (weighted average) = (17470.2+47964.1)/3 = $27634.7

Liquidation discount = 50000-27634.7 = $22365.3

Determining the elasticity coefficient (Ke) is more difficult due to the possible lack of necessary information. The price elasticity of demand is the ratio of the percentage change in volume demanded and the percentage change in price (this formula is applicable for any price changes in the case of linear demand curves and small price changes in the case of arbitrary demand curves). Typically, demand is elastic when prices are high and inelastic when prices are low. When Ke>1 demand is elastic, when Ke<1 -- неэластичный. В случае Кэ = 1 имеет место единичная эластичность.

The basis for determining the coefficient of price elasticity of demand is market information, on the basis of which a graph of price elasticity of demand can be constructed.

To calculate the liquidation discount component, also conditioned by factors of forced sale and taking into account the elasticity of demand, the following model can be considered:

L=((Tmp / Tpe)2 - 2(Tmp / Tpe) +1) *e -B*Ke. (3),

where L is the liquidation discount; Ttr -- time of required exposure (implementation); Tre - time of market exposure; RS - market value; e -B*Ke-- component of the liquidation discount, due to the forced sale and taking into account the elasticity of demand; e -- the base of the natural logarithm (e=2.718); B is a coefficient reflecting the forced sale factor, and B<1 (значение коэффициента в зависимости от «степени вынужденности» находится в интервале 0,2-0,5); Кэ -- коэффициент эластичности спроса.

The formula determines the coefficient discount from the market value as a function of the time of the required exposure, depending on the timing of the sale of assets, as a proportion of the value of the market exposure; in this case, E is a parameter that determines the range of changes in the liquidation discount, i.e. from 0 to a value in value terms equal to (РС*e -B*Kе). With absolutely inelastic demand, the coefficient of price elasticity of demand tends to zero, (РС*e -B*Kе), respectively, to РС, i.e. reaches the market value; with absolutely elastic demand, elasticity tends to infinity, and the discount, accordingly, to zero. Thus, the higher the price elasticity of demand, the lower the discount and vice versa. The disadvantages of this approach to calculating liquidation value include the difficulty of calculating the elasticity coefficient.

3. Legislative framework for the application of liquidation value

The legislative framework for the application of liquidation value is regulated by the legislation of the Russian Federation in cases of insolvency (bankruptcy) of legal entities, seizure of its property with the subsequent forced sale of this property in order to pay off accounts payable or collect arrears on taxes and other payments to budgets of different levels in accordance with the current enforcement proceedings.

Currently, in real estate valuation it is very often necessary to determine the market value. The methodology for its calculation, which came to us from Western Europe and America, has already been successfully tested in domestic economic conditions. The definition of other types of value is much less common in Russian valuation practice, which affects the low level of their methodological support. In particular, this situation is observed when calculating the liquidation value of real estate.

Improving the calculation of this type of value, and, accordingly, the methodological and methodological base, is extremely relevant today, since the financial and economic crisis that occurred in August 1998 gave rise to a sharp increase in the need for the use of liquidation value among market economy entities.

A review of domestic literature showed that practically no one has studied this topic in depth, while liquidation value is one of the main elements in the system of anti-crisis management of bankrupt enterprises and enforcement proceedings. Recently, the greatest need for this type of value has also been observed in the management system for real estate that is federally owned and located on the territory of the city of Moscow, since this Federal Subject is the largest federal owner, on whose territory there are about 3 million square meters. m of office and administrative space, hotels, car depots and other premises.

One of the pressing and important problems is the problem of liquidation of long-term construction projects and unfinished construction, including in the territory of the city of Moscow, where there is a significant number of unfinished industrial and administrative facilities, in which significant public funds have been invested. Therefore, it is very important to correctly evaluate this real estate, which is expected to be sold at auction in accordance with the draft joint Resolution of the Ministry of Property Relations of the Russian Federation and the Moscow Government “On involvement in economic turnover and ensuring the efficiency of further use of unfinished construction objects, as well as objects subject to reconstruction or restoration , which are federally owned and located on the territory of the city of Moscow."

The opacity of information about real real estate purchase and sale transactions sold at auctions in Russia is one of the main reasons for the weak methodological support for calculating the liquidation value, and, accordingly, the accuracy of determining its value, while in European countries such information is open and accessible and there are no problems with calculating this type of value in foreign valuation practice.

In addition to this problem, there is another, no less important, problem - this is the regulatory and legislative regulation of the application of liquidation value and the consolidation of its unambiguous interpretation. Thus, in accordance with the Federal Law of July 21, 1997 No. 119-FZ “On Enforcement Proceedings,” it is required to calculate the market value of property that must be sold at auction. But, if it is sold at auction, that is, for a limited period of time, which is typical for non-market conditions of sale, then this does not correspond to the concept of market value enshrined in Article 3 of the Federal Law of July 29, 1998 No. 135-FZ "On Valuation Activities In Russian federation". In particular, the following provisions are violated: “... the value of the transaction is not reflected in any extraordinary circumstances...”, “... the price of the transaction represents a reasonable remuneration for the object of evaluation and there was no coercion to complete the transaction in relation to the parties to the transaction on any side... " and others, since no reasonable owner will sell property at an auction in an unreasonably short time and at a price below the market price. This directly indicates the forced sale, which is inherent in the concept of liquidation value. Thus, appraisers should determine not the market value, but the liquidation value of the seized property.

Due to the weak regulatory framework for real estate valuation and the lack of standards approved by the Government of the Russian Federation, the concept of liquidation value and its scope of application has not yet been established. The only document that gives at least some concept of it is the FCSM Order No. 6-r dated September 25, 1996 “On approval of methodological recommendations for assessing the property of mutual investment funds.” It states that "liquidation value ... refers to the forced sale value of a property, that is, the amount of money that can be obtained from the sale of a property within a time frame that is too short compared to the marketing time determined under the market value standard." This concept practically coincides with the concept of liquidation value given in International Valuation Standards No. 2 “Valuation Bases Other than Market Value” (still not recognized by the Government of the Russian Federation, unlike the governments of some other states), which states that “liquidation value or forced sale value is the amount of money that can realistically be realized from the sale of property in a time frame too short to permit adequate marketing as defined by market value.In some states, forced sale situations may include cases involving an involuntary seller and informed buyers about the difficulties experienced by the seller." These concepts most accurately reveal the essence of liquidation value.

From the above concepts we can conclude that the only factor that influences the liquidation value and distinguishes it from the market value is the factor of “forced sale,” which is typical for non-market conditions for the sale of real estate.

Thus, it becomes quite obvious that to calculate the liquidation value in the current Russian conditions, it is possible to use the following equation:

With face. = From market. x (1 - K out),

· With face. - liquidation value of real estate;

· From the market. - market value of the object under study;

· To out. - adjustment for forced sale, provided 0< К вын. < 1.

According to the above equation, the liquidation value is calculated in two stages. At the first stage, the market value of the property under study is determined. At the second stage, the amount of the adjustment adjustment for forced sale is calculated and included in the value of the market value, that is, the market value is adjusted for the factor of “forced sale” (for non-market conditions of sale).

If calculating the market value of real estate does not cause difficulties, then determining the adjustment allowance for forced sale and its mathematical justification raises many questions. In practice, appraisers intuitively accept it in the range from 0.1 to 0.3 (10 - 30% of the market value), which is why the auction is often declared invalid. Psychologically, they are afraid to accept this indicator as large due to the difficulty of justifying it. While an analysis of statistics on real estate auctions and personal experience show that the adjustment adjustment for forced sales ranges, on average, from 0.3 to 0.5, and sometimes reaches 0.8.

In order to give a mathematical basis to the calculation of the adjustment adjustment for forced sale, an analysis of the results of more than 100 auctions was carried out in three segments of the real estate market - office, retail and industrial and warehouse purposes, located in Moscow and owned by legal entities using the method analysis of paired sales. The results of the analysis are given in table.

Ranges of fluctuations in the values of the adjustment allowance for forced sale


	Functional purpose of the object	Range of fluctuations in the values of the adjustment adjustment for forced sale, %
	Office buildings and premises:
	Trade buildings and premises:
	Warehouse and industrial buildings and premises:

As a result of the analysis of the table data, a trend in changes in their average value was identified, indicating that in an unstable economic situation in the country (end of 1998), the values of adjustments for forced sales are greater than in a relatively stable economic situation (end of 2000).

The “forced sale” factor, which influences the liquidation value and is expressed quantitatively in the form of an adjustment for forced sale, in turn consists of a system of factors of a lower level.

Forced to sell factor:

· · selling methods

· · sales dates

· · investment risk

· · selling costs

· · other

Further study of the dependence of the adjustment adjustment for the forced sale of these objects on the constituent elements of the “forced to sell” factor will allow us to derive a universal formula for calculating the liquidation value.

4. Estimation of liquidation value

The liquidation value of an enterprise is its value during a forced sale, equal to the amount of money in the form of the difference between the income from the liquidation of the enterprise received as a result of the sale of its assets for liquidation. In this case, we are talking about selling property in a time frame that is too short for adequate marketing.

An assessment of the liquidation value of an enterprise is carried out in cases where there are serious doubts about its ability to remain a going concern (the enterprise is in a state of bankruptcy), or if the value of the enterprise upon liquidation may be higher than if it continues to operate.

The situation of bankruptcy and liquidation of an enterprise is an emergency. The likelihood of a positive decision on non-payment, which usually accompanies this situation, depends on the value of the property owned by the liquidated enterprise.

An assessment of the liquidation value of an enterprise is necessary not only in the event of liquidation of the enterprise. It is important in many other cases, for example: when financing a debtor enterprise; during the reorganization of an enterprise (including during the examination of enterprise reorganization programs); when developing a plan for repaying the debts of a debtor enterprise that is under threat of bankruptcy; when analyzing and identifying the possibility of separating individual production capacities of the enterprise into economically independent organizations; when assessing applications for the purchase of an enterprise; when examining fraudulent transactions involving the transfer of property rights to third parties.

Estimating the liquidation value of an enterprise in a bankruptcy situation has a number of features, mainly due to the nature of the emergency situation itself. These features must be taken into account when assessing the property.

The assessment of liquidation value refers to the so-called active types of assessment, when, based on the results obtained, many interested parties make appropriate management decisions. A feature of the liquidation value of an enterprise is the high degree of dependence of third parties on the results of the assessment.

Based on the general rules on the liquidation of legal entities established in Articles 61 - 65 of the Civil Code of the Russian Federation, the main difference between the liquidation of a legal entity (enterprise) and its reorganization in any form is that liquidation does not imply succession, i.e. transfer of rights and obligations of the liquidated enterprise to other entities.

The assessment of the liquidation value of an enterprise is calculated by subtracting from the adjusted value of all assets on the balance sheet the amount of current costs associated with the liquidation of the enterprise, as well as the value of all liabilities.