The 2020 Federal Budget brought an important change for business owners. The change stated that small and medium businesses ‘can claim an immediate deduction for the business portion of the cost of assets in the first year the asset is used, “已安装或准备使用”. During the difficult times related to COVID-19, the threshold for the instant asset write off was raised to $150,000. However the Federal Budget announcement (pending legislation) goes even further, allowing businesses with aggregated turnover under 5 billion to claim an immediate deduction for the full cost of any eligible assets acquired/installed before 30 June 2022, thus encouraging increased business investment.
While not all businesses are currently in a position to further invest in equipment or other assets, we anticipate substantial increased investment for many of the clients we prepare valuations for. 然而，在考虑这样的投资, it is important that we understand the basics of a 业务 Valuation.
Most businesses are valued on a multiple of their future maintainable earnings (otherwise known as ’expected annual profit’). 因此, the impact of large purchases on the ongoing profit of the business needs to be considered, particularly in relation to recent Budget announcements.
即时资产核销
表面上看, ‘instant’ (or immediate) asset write-off is a one-off, non-recurring cost which would be either excluded, 或者调整, 在商业评估中. It is important to consider the annual ‘charge’ for the equipment. To do this a business needs to address questions such as:
- 资产将持续多久?
- Will the asset provide excess capacity that is not utilised?
- What might you pay for the asset if you leased it from an arms-length provider (where the lessor and lessee do not directly influence each other)?
折旧
类似于即时资产冲销, generous tax provisions enable many small businesses to depreciate assets (claim them over time) at an accelerated rate. An example of this is the depreciation of a computer. 税收立法, prior to the instant asset write-off concessions mentioned above, allows for a computer to be written-off over three years. However, some businesses find a computer is still useful to them after this time.
折旧 is often an amount greater than the decline in value of the asset. In these circumstances the depreciation can be adjusted in the valuation. Adding back some of the depreciation would in turn increase ongoing profitability in these circumstances.
处置或出售资产所得的利润
Given that the instant asset write-off records assets as having a ‘nil’ value for tax purposes, we are now expecting to see an increase in the profit on sale of assets in the future. This will occur when an asset is sold above a zero price. 在商业评估中, this is added back entirely as it is both ‘one off’ in nature and not core to business operations.
净资产估值
If there is no profit line in the business, it will sometimes need to be valued based on its net assets (assets minus liabilities). This valuation method considers the value of the assets at the date of valuation, e.g. if you have a piece of machinery that is three years old what is its estimated worth? 这一点很重要, 以及更普遍的记录保存, for the assets to be added to your depreciation schedule/asset register and fully depreciated.
If you have questions on how your business decisions may impact the value of your business, please call your Accru Adviser to explore this.
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