The economic crisis most negatively affected the financial condition of many Russian companies, as a result of which the value of net assets could significantly decrease. Net assets are the carrying amount of all property of an enterprise, less the amount of the company's liabilities. The value of net assets can be calculated on the basis of the balance sheet, it is reflected in the financial report on changes in equity. The cost of the net assets of a joint stock company can be calculated in accordance with the order of the Ministry of Finance of Russia No. 10, however, it also stipulates that the calculation procedure does not apply to insurance and banking joint-stock companies. The procedure for assessing the net assets of an insurance company is regulated by an order of the Ministry of Finance of Russia in conjunction with the Federal Service for Financial Markets No. 7. Instead of calculating net assets, credit organizations calculate their net worth.
The size of net assets often affects the payment of dividends, and the fate of the company almost always depends on it. In the event that the composition of net assets is significantly less than the authorized capital, the company will be obligated to immediately take certain measures. If the value of net assets is below the minimum amount of the authorized capital, then it is entirely possible to decide on the voluntary liquidation of the enterprise, or liquidation of the company at the request of the tax authorities in court. It should be borne in mind that the liquidation of a legal entity means the termination of its activities without transferring rights and obligations to another person. The net assets of joint-stock companies are subject to disclosure in the annual and interim financial statements of the enterprise, although there are no such indications for limited liability companies.
The composition of net assets is important for enterprises paying dividends to their shareholders, the decision on the distribution of profits between participants is made at a general meeting of shareholders. However, a limited liability company does not have the right to make such a decision if the total value of the net assets at the time of the decision is less than the authorized capital, or will be less as a result of the decision. A limited liability company has the right once a quarter, six months or a year to raise the issue of the distribution of enterprise income between its participants.
A joint-stock company cannot decide on the distribution of profits if:
- net assets of an enterprise less than its authorized capital;
- as a result of payments, the value of the company's net assets will become less than the reserve fund and its authorized capital;
- on the day of the decision, the composition of net assets is less than the authorized capital of the enterprise.
In the domestic market there are many enterprises with a negative value of net assets, and they exist quite favorably until the tax authorities file a lawsuit to liquidate the enterprise in court. This fact once again proves that the head of the enterprise should always be aware of his financial situation, although the accounting statements are not always objective. The most important indicators that determine the capital structure and characterize the stability of the enterprise are net assets and their composition in the total balance sheet.
Analysis of the value of net assets consists of an analysis of the dynamics of net assets and an assessment of its reality, an assessment of the ratios of authorized capital and net assets, as well as an assessment of the profitability and turnover of net assets. At the same time, one should not forget that the size of net assets is rather arbitrary, since it is calculated by calculating the balance sheet, in which assets are presented at accounting prices rather than market prices.