Net worth
The net assets (also net assets , English net worth , net assets ) is in the financial accounting and economics of the balance (i.e.,.. The difference) between the on the active side of a balance shown assets (gross power) and on the passive side reported liabilities of a company . Since gross assets are made up of real assets + cash holdings + other receivables and the balance " net financial assets " is defined as cash holdings + other receivables - liabilities, the net assets also result from real assets + net financial assets.
General
In this form, the net worth corresponds to the equity , which - as the balance of gross assets and liabilities - represents the residual amount in the balance sheet. To the net assets - and equity - all profit shares are added, the distribution of which the shareholders finally waived. The provisions formed from profits do not belong to equity and net assets . These reduce the net worth because they are included in the liabilities. However, the concept of net worth appears not only in companies, but also in other wealth holders. Other economic entities such as private households ( private financial planning ) or the state with its subdivisions ( public budget ) determine their net worth by subtracting private wealth or state wealth from debts or state debt .
Use of the term
The term net worth is used in different areas of daily life.
Law
Net worth is a legal term that occurs in various areas of law (e.g. Section 92 GenG). Since there is no legal definition , it is an indefinite legal term . The BVerwG also defines it as the remainder between gross assets and debts . With regard to the capital preservation rules, it is important that in the case of the GmbH for the purposes of creditor protection, the protected assets may not be paid out to the shareholders. This requires that the share capital must be compared with the social net worth.
In insolvency law , the obligation to file for insolvency depends on whether there is any net social wealth. If the net worth in the over-indebted status is negative, there is a reason for insolvency regardless of a positive or negative continuation prognosis. Conversely, there is no obligation to file for insolvency in the case of positive net worth and negative survival prognosis and positive net worth and positive prognosis.
In addition to legal persons , assets are also natural persons . The net worth is determined similarly for the latter. The debts ( inheritance liabilities ) are deducted from the total assets (such as an inheritance ) , so that the net assets are left over for the determination of the taxable value. In the marital community of surplus , the calculated gain from the initial and final assets of each spouse. Both terms of wealth are based on net worth, because the law requires the deduction of debts ( Section 1374 (1) BGB).
Financial accounting
When buying a company , the net worth is one of the main bases for calculating the purchase price for an entire company. The law speaks of the “fair value of assets and liabilities” ( Section 246 (2) sentence 3 HGB). If the purchase price actually paid is above the determined net worth, it is a question of “goodwill”, and conversely, “badwill”. According to the regulations on the treatment of “goodwill” in the balance sheet of the acquiring company, only the portion of the purchase price exceeding the net assets can be capitalized ( Section 246 (1) sentence 4 HGB). The "badwill" as a "negative difference" to the net worth is to be declared as a negative earnings prospect or as a "lucky buy" and recognized as a provision in accordance with Section 301 (3) HGB ("difference from capital consolidation"), i.e. reduced under otherwise unchanged conditions the net worth of the acquiring company. This provision may only be released if either the expected unfavorable development of earnings has occurred or it is certain on the balance sheet date that the badwill corresponds to a realized profit ( Section 309 (2) HGB; IAS 22.61 ff.).
The net worth increases through increases in equity or retained profits with otherwise unchanged balance sheet conditions and vice versa. The net worth is liable for the losses and debts. If the losses completely consume the net worth, the result is over-indebtedness as a reason for insolvency.
National economy
The national accounts (VGR) are based on an asset account that compares the economic assets (real assets and receivables) with the liabilities and shows the net assets as the balance . In the context of the balance of assets, national wealth is defined as the sum of all net wealth within an economy. The European System of National Accounts (ESA) compares the assets (assets and receivables) with the liabilities, the liabilities, analogously in the preparation of balance sheets. The balance is the net worth. For the economy as a whole, this is referred to as national wealth.
Net worth and debt
Lenders , particularly credit institutions , only grant loans on the basis of existing assets (see also the standardized approach to credit risk ). The acquisition of assets (real estate, motor vehicles) is usually not fully credited because in the event of a forced sale the original purchase price can no longer be achieved and the interest burden is too high. Therefore, it can normally be assumed that the debts only make up a fraction of the assets, so that the asset holders have positive net worth. Of negative net worth or negative net worth speaking, however, if for financial supports, the debt is higher than the total assets; then there is over-indebtedness .
See also
- Net worth access theory (microeconomic, especially tax law)
Individual evidence
- ^ Rolf-Dieter Grass, Wolfgang Stützel (1988): Economics - an introduction also for non-specialists . Munich: Vahlen, p. 53ff.
- ↑ Michael Bitz (2007): Willingness to create and striving for harmony of the Renaissance man: Luca Pacioli and the consequences - dogma-historical and linguistic reflections on the concept of equity. In: Winkeljohann, Norbert / Bareis, Peter / Volk, Gerrit (eds.), Accounting, Equity and Taxation - Development Trends, Festschrift for Dieter Schneeloch on his 65th birthday. Munich 2007, pp. 147–166 ( online )
- ↑ Hartmut Bieg in Wolfgang Lück (Ed.), Lexikon der Betriebswirtschaft , 1986, p. 957
- ↑ BVerwG, judgment of June 30, 2011, Az .: 5 C 23.10
- ↑ Francisco José Alvarez-Schänen, Capital preservation rules in the GmbH , 2007, p. 10 f.
- ^ Fritz Binz / Harald Hess, Der Insolvenzverwalter , 2004, p. 43
- ^ Fritz Binz / Harald Hess, Der Insolvenzverwalter , 2004, p. 43
- ↑ Walter Kaiser, The inventory account series in the system of national economic total accounts , 1972, p. 146 ff.