AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
Figure 1: Amortisation scale of low-value tangible assets (in %)
Source: Authors.
Using the amortisation scale (Figure 1), the valuation of low-
value tangible asset, whose list is given in Table 2 along with the
period of its use, its purchasing price and the price used for the
valuation in CZK will be carried out.
Table 2: low-value tangible assets of the association XYZ
Item
Period of
use [years]
Purchasing price
[CZK]
Value for valuation
[CZK]
Washing machine
6
11,444.46
572.22
Writing desk
6
4,516.30
225.81
Rack
6
5,559.97
277.99
Table
6
5,061.34
253.06
Electric saw
6
3,474.70
173.73
Built-in cupboard
6
8,860.65
443.03
Suite of furniture
6
18,181.73
909.08
Washing machine
6
8,877.31
443.86
Cutter
6
23,757.98
1,187.89
Rack systems
6
17,817.30
890.86
Manual cutter
6
31,578
1,578.90
Rack
6
11,357.25
567.86
Office furniture
6
10,905.04
545.25
PC Apple
6
26,993.87
1,349.69
Working table (2
pieces)
6
3,617.41
180.87
External HDD
6
4,241.28
212.06
flashdisk
6
782.31
39.11
Cordless screwdriver
6
4,173.85
208.69
Rack system
6
11,780
589
Cleaning machine
(2 pieces)
6
6,370.58
318.52
Washing machine
6
14,433.35
721.66
Pallet carrier
6
14,630
731.50
Mobile stand
6
6,365
318.25
Working table
6
3,990
199.50
iPad 2
6
11,958.60
597.93
Mat cutter
6
4,083.10
204.15
GPS satnav
5
4,654.05
465.40
Chair
4
4,294.95
858.99
Textile cutting
machine
4
28,177.95
5,635.59
Apple PC
(2 pieces)
4
23,545.75
4,709.15
Camera
(2 pieces)
4
8,644.05
1,728.81
Mobile phone (2
pieces)
2
10,198.25
5,099.12
Mat cutter
1
28,181.75
19,727.23
Notebook
1
7,450.85
5,215.59
Mobile phone
1
4,231.30
2,961.91
Apple PC
1
21,975.40
15,382.78
Printer
1
12,540
8,778
Source: Authors.
Table 2 shows that low-value tangible assets consist of 38 items,
and its overall purchasing price was CZK 428,705.70 CZK. On
the basis of its value determined using the amortisation scale, the
overall value of CZK 84,303 will be included in the calculation
of the intangible assets value.
On the basis of selected accounting indicators, the value of
financial asset will not be determined for the model association
XYZ, since according to these accounting indicators, the model
association XYZ does not have any cash in hand or funds
deposited in bank accounts.
Financial asset of the model association XYZ includes its
receivables invoiced to customers. Therefore, any receivables of
the model association XYZ created directly in relation with its
activities will be further examined. Such receivables will then be
divided in terms of their recoverability, i. e. receivables with a
maturity longer than one year (irrecoverable receivables) will be
identified. If such receivables are identified, in overall valuation
of this item, they will be deducted from other receivables with a
maturity shorter than one year.
Furthermore, the liabities of the association XYZ will be valued
by the sum of all outstanding invoices as of the valuation date
(31 December 2017). In order to determine the value of the
association XYZ´s intangible assets using the asset-based
valuation method, it will be necessary to carry out the valuation
of the vehicle fleet of the association, which consists of four
motor vehicles. The valuation of the motor vehicles will be
carried out using the software CabiCAT GT of the company
Cebia s.r.o. Using this software, it is possible to determine the
current market price of a vehicle as of the required valuation
date.
The last item to be valued in order to determine the value of the
model association XYZ´s asset and to determine the value of its
intangible asset is the production premises of the XYZ
association. These production premises (property) will be valued
using the comparative method on the basis of found similar
properties for sale using advertising servers. The prices of
similar properties found will be converted to the unit price on the
basis of their floor area and subsequently, this unit price will be
modified using five coefficients: coefficient of price source
reduction (K
1
), coefficient of the construction and technical
condition of the property (K
2
), coefficient of equipment (K
3
),
coefficient of location and size of land (K
4
), and coefficient of
floor area (K
5
). By determining the median of these modified
unit prices, it will be possible to identify the modified unit price
of the property. This value will be multiplied by the floor area of
the production premises used by the model association XYZ.
The overall floor area of the property used for manufacturing
and at the same time to meet the needs for dwelling of both
members of the model association XYZ is 180 m
2
, where 70% of
this area is used as living space and 30% as production premises
of the model association XYZ. Subsequently, the value of the
land on which the property is situated, determined by the
relevant normal prices in the locality, will be deducted from the
overall price of the property. The basic price of a building plot in
the locality where the given property is situated is CZK 1,253
CZK/m
2
. The area of the land where the given property is
situated is 1,300 m
2
.
In the second part of this contribution, the model association
XYZ will be valued using the selected income-based valuation
method. The value of the association determined using the
income-based method represents the sum of all tangible and
intangible assets of the association. In order to determine the
value of the association using the income-based method, the
two-stage DCF model will be used. For this purpose, the
financial plan of the association XYZ will be drawn for the
period of 2018–2021.
The next step in the valuation of the model association XYZ
using the selected income-based method will be the
determination of the amount of alternative costs of equity r
e
. For
this purpose, the build-up model will be used. Formula 1below
represents the selected build-up model of the calculation.
=
+
+
+
(1)
where:
r
e
r
cost of equity,
f
r
risk-free yield,
pod
r
risk premium for business risk,
finstab
r
risk premium for financial stability,
la
risk premium for size of enterprise.
Yield value of the model association XYZ will be calculated as
the sum of the values of the first and second stage of the DCF
model. Formulas 2 and 3 show the individual steps in the
calculation. Yield value in the 1st stage of the DCF method will
be calculated as follows (see Formula 2):
0
20
40
60
80
100
0
1
2
3
4
5
6
7
A
ss
et
s va
lue
[
%
]
Period of assets use [in years]
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