The modern realities of the economic situation lead to the fact that companies, in order to survive, try to use as many assets as possible. Regardless of what the company does, it will certainly insure itself with one or more types of activities, branches or subsidiaries.

Non-core and core assets can not only generate profit, but also exist to meet the social needs of the population. It all depends on what goals the company is pursuing and what its strategic intentions are.

Differences between core and non-core assets

The asset profile depends primarily on the company's strategy. If assets produce results that help achieve the main goals of the company, then they will be considered core. They are involved in the production and marketing of products, are responsible for the supply of raw materials, etc.

Non-core assets exist on the company’s balance sheet, but are not responsible for the implementation of strategies. They are considered secondary and help to obtain financial results, but do not affect the main activity. So, for example, a bank’s core assets will be associated with the sale and implementation of banking products, and non-core assets will be construction sites for future buildings or shares from participation in other capital.

Signs of non-core assets

In the economic activities of an enterprise, the following situation often occurs. Excess assets that are not decisive for core activities absorb a significant portion of resources without generating income. And in another case, the potential of dormant assets is very high, but the owner simply does not have enough time for it. What to do in such situations? Should we consider the asset core or try to reorganize it? Assets that meet the following criteria are subject to mandatory restructuring:

1. The owner or manager, due to his busy schedule, cannot pay attention to them.
2. The assets are completely unrelated to the main activity.
3. Large amounts of investment are required for non-core facilities to begin generating income.
4. The cost of a non-core asset is higher than the price of a similar object on the market.

If positive answers were received to these questions, then you need to think about how to restructure non-core assets in a way that changes the situation. If this cannot be done, it would be more rational to get rid of them. Selling non-core assets can bring significant benefits.

Advantages

It is not for nothing that many large companies are trying to attract as many non-core assets as possible. This is due to a number of advantages.

First of all, the sale of non-core assets almost always generates income. Even if it is small, it will significantly affect the final financial result. There are several forms of ownership when social goals are pursued without generating income, but in such cases you can count on tax benefits from the state. In all cases, non-core assets bring positive results.

Secondly, the enterprise’s costs for main production are reduced. Due to differentiated activities, costs per unit of core asset are reduced, and this also affects the final result and the overall profitability of the company.

The higher the profitability, the greater the investment attractiveness of the company. This is the third advantage. The greater the financial income, the greater the chance to improve and modernize production, increase labor productivity and improve conditions for employees.

And the fourth benefit that comes from selling non-core assets is that the company can better focus on the resources needed to achieve its main strategic goals.

Types of non-core assets

All those assets that are not related to the main activity can be expertly divided into two main groups:

The first category includes excess assets, which represent real ballast for the company. In the process of economic activity they cannot always be noticed, but as soon as a full audit or any reorganization is carried out, they come to light. It may turn out that assets have been on the balance sheet for many years, but do not really bring any results, and the company’s costs of maintaining them only increase every year.

As a rule, there are several ways of what to do with such ballast. They can be transferred to the main activity and used to obtain financial results. Thus, non-core assets will turn into core assets.

The second way is to lease or manage it to another entity. It could even be your own branch. If non-core assets are completely in the way or there is no need for them, they can be sold.

Investment assets

The second category of non-core assets can be called investment. They are specially purchased by owners, investors or credit firms and are immediately added to the balance sheet as non-core assets. The acquisition of each of them is a separate project, and a separate strategy is developed for its implementation.

Investment assets have become an integral part of large businesses in our country. Any self-respecting company, bank, holding company, etc. is simply obliged to support others. Excess assets do not pose a special burden for them. Let's give a few examples.

"Gazprom"

It's no secret that the country's largest company is implementing many projects. All of them are collected into the so-called media holding. Its name is Gazprom-Media. It includes many objects, including several radio stations: "Echo-Moscow", CITY-FM, Relax-FM, "Children's Radio".

The publishing house "Seven Days" is also the brainchild of Gazprom. The company is responsible for publishing periodical newspapers and magazines: “Itogi”, “7 days”, “Tribuna”, “Panorama TV”. This also includes several television magazines, for example "Caravan of Stories".

On television, Gazprom Media has also found its niche. The NTV-Kino film company is successfully implementing projects and supporting the Oktyabr and Crystal Palace cinemas. And the Internet portal RuTube is in complete power of the Russian giant.

Gazprom also created the non-state pension fund GAZFOND, which is one of the main owners of the bank OJSC Gazprombank. Here the giant owns 41.73% of the shares.

Non-core assets of Sberbank

The 2008 crisis benefited the country's main bank. At that time, many objects that became non-core assets were added to Sberbank’s balance sheet. Among them are residential and non-residential real estate, an entire retail chain and a share in the oil and gas sector.

But a huge number of objects required constant support and financial investments. As a result, the main bank of the country became a debtor and almost went bankrupt. The management of the company considered it right to sell all non-core assets of Sberbank, which happened in 2010.

In 2009, Sberbank created the Russian Auction House, whose main activity was the sale of non-core assets and property left over from borrowers. The auction house is still operating successfully, implementing projects of other financial companies.

Today, Sberbank is the founder and co-owner of many subsidiaries providing various services in the financial sector.

JSC "Russian Railways"

The largest transport company took part in many financial projects. First of all, she is a co-owner of KIT Finance, where Russian Railways owns 19.29% of the shares. The bank was founded back in 1992 and operates successfully to this day, providing services for legal entities, corporate lending, and servicing individuals.

Another bank, founded in the same 1992 with the support of Russian Railways, is TransCreditBank OJSC. Here the share is higher - 25%. To this day, the financial institution serves the transport system and related industries.

All Russian Railways employees receive a pension and make contributions to the non-state welfare fund. Over a decade of work, the fund has proven that it can be trusted.

But the largest investment of Russian Railways is participation in the Mostotrest OJSC project. This is the largest company in Russia engaged in the construction of transport infrastructure.

OJSC "VTB"

Since 2009, the largest Russian bank has owned the company PJSC Hals-Development. This is the first development company in Russia that is engaged in the construction of residential and non-residential complexes.

The construction record was achieved in 2014, when the company managed to put into operation more than 200 thousand square meters. meters. First of all, this is the "Children's World" on Lubyanka, a huge complex in the resort area "Kamelia" (Sochi) and the elite housing block "Literator".

But for VTB Bank these are not the only non-core assets. The value of the financial organization's assets amounts to millions, primarily due to property in the gas industry.

Separation of non-core assets

As can be seen from the above examples, non-core assets can either be allocated within the company or appear from the outside. If management has an idea to acquire an additional source of income, it should analyze the following steps:

1. Determine the profile of assets.
2. Analyze the profitability and efficiency of each asset.
3. Conduct a market assessment.
4. Identify possible ways of restructuring.
5. Analyze risks.
6. Put up for sale on a competitive basis.
7. Set up management of the selected object.

conclusions

Working with non-core assets is a very labor-intensive process. Specialists within the company may not always have enough knowledge and skills to manage them. Therefore, the best way out in this case is to involve consulting firms. In any case, reasonable and competent management of non-core assets brings good income.

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Working with non-core assets.

The topic of non-core assets is currently very popular. As a result of privatization, many former state-owned enterprises ended up with their own sanatoriums, recreation centers, hostels, subsidiary farming, unregistered land plots, non-core production, numerous subsidiaries and “non-subsidiaries” companies, and these are far from our only clients working with non-core assets. In practice, any organization can face this problem.

The first thing that needs to be defined is the very concept of non-core assets. Non-core assets are assets that are involved in non-core activities for the organization. The question, however, is what is the main activity for this organization. Owners of corporations in the early 90s actively bought all available assets and answering this question is sometimes quite difficult. Moreover, if dependent companies operate in adjacent markets or use the same raw materials or similar equipment, then without qualified consultants, enterprises have difficulty identifying non-core assets, let alone options for restructuring them. Therefore, it is a mistake to consider a non-core asset to be bad by definition. The non-core nature of an asset depends on many factors: the economic situation, business development prospects, market, etc. The concept of a non-core asset is subjective and is associated with the owner’s business development strategy. If the asset in question is involved in the core activities of the business, determined by its strategy, then it is core for this owner. Everything else is non-core assets.

Signs of non-core assets.
Often, a company's auxiliary business consumes significant resources, while being ineffective and requiring large investments. In most cases, this asset is one of the first candidates for allocation. And, for example, in another situation, the company’s management, on the contrary, may not have enough time to work with a non-core asset, while it has a high market price. What is the right thing to do in this case?
Often, when it comes to spinning off assets, what is important is not so much cost reduction as the ability to concentrate the company's efforts on its core business. Therefore, the selection of non-core assets subject to restructuring is multi-criteria. In practice, non-core assets are identified that satisfy the following conditions:

Management does not have time to devote time to non-core issues (or, on the contrary, spends too much time on them). The cost of non-core products is higher than the price of market analogues. There is no significant connection with the main business. Low quality of non-core products. Weak dynamics of non-core business. High market price for these assets. Large investments in non-core production are required. The second question that a business owner may have is: “Why do I need this?” Not the non-core asset itself, of course, but the hiring of consultants, possible reshuffles within the company, pre-sale bustle, etc. Isn’t it easier to leave everything as it is?
No and here's why:

A division of a company that provides services or goods to the parent company, even at lower prices, does not always do so in the best possible way. Confidence that its products will find demand, that is, in fact, the absence of competition, does not contribute to high quality. In addition, some part of the business may become unmanageable.
Non-core activities usually divert significant administrative and financial resources, which adversely affects the core business. There are other reasons that are no less important.
The allocation of non-core assets is used to solve specific problems of an enterprise, for example, the problem of increasing the attractiveness of the entire business for potential investors before its sale or issue of securities; Mobilization of resources to finance projects for core activities.

Expanding or maintaining market share in non-core activities requires significant investment. The decision to sell a non-core asset may be caused by an increase in demand from strategic investors and, accordingly, a high price for this type of asset.
The need to concentrate the resources of the company's enterprises on core production activities. Optimization of the structure of assets and liabilities of enterprises engaged in the production or provision of production of main products.
Achieving a positive economic effect as a result of restructuring. Increasing the liquidity of the balance sheet structure through proceeds from the sale of non-core assets.
Receiving income from the sale of a non-core asset. Reducing costs associated with the maintenance and use of non-core assets. These and many other factors push owners and top managers to think about the future fate of certain company assets. And contact consultants.
Hiring a consultant to work with non-core assets is a separate task. Consulting services, especially for a large enterprise, are not cheap.

The cost of services for separating a non-core business, like the cost of any other consulting project, depends on the level of complexity and volume of work, which, in turn, determine the required labor costs. For example, a large project for a machine-building enterprise located in two regions to allocate four to five non-core auxiliary production facilities with a total staff of 4-5 thousand people can take from ten months to a year. Moreover, in such cases it will not always be possible to save money on choosing a consultant. Consultant compensation is usually a mix of fixed fee and fee-for-success.

Even if the asset owner's management has a solution option for a non-core asset, it is sometimes necessary to obtain an independent judgment regarding the sale of the asset, its pre-sale preparation or restructuring. The reputation of the consultant, his name and experience are important here. But even in cases where a company does not have to report to minority shareholders, there can be many nuances when choosing a consultant.

The main criterion for his selection is successful practice as a consultant. This approach to choosing a consultant can be considered common to everyone, but in each individual case it is necessary to take into account the characteristics of territories and regions. It is important to be sure that the consultant knows not only management issues, but also clearly understands the legal and administrative practice of the region, industry, and direction.

The value of a consultant lies in his fresh perspective on the situation. Sometimes the solution to a problem already exists within the company, but it just has to be given a clear form. At the same time, not a single consulting project can be completed without the active participation of specialists from the company itself. Otherwise, he will be a stranger to the organization. Moreover, the final project may require contacting several consulting companies. And of course, it is not at all necessary to choose one consultant to work with non-core assets. The separation, restructuring and alienation of non-core assets require completely different types of work, such as optimization of the business structure, audit and assessment of the market value of assets, legal examination and development of optimal schemes for carrying out transactions with property, registration and organization of sales.

When separating assets, you usually have to go through several stages.
Scheme for the allocation of non-core assets
The process of restructuring non-core assets of an enterprise is divided into the following stages:
a. Determination of asset profile.
b. Analysis of asset performance.
c. Market analysis of relevant products.
d. Exploring restructuring options.
e. Asset valuation.
f. Analysis of risks of separation and measures to reduce them.
g. Sale (rent) on competitive terms.
h. Managing relationships with a dedicated department.
First of all, ANALYSIS, the consultant must analyze the market for non-core assets, assess the degree of their involvement in the main business process, find potential buyers for the asset, evaluate their requirements for the purchased assets and, finally, develop a business plan for each.

Techniques for selling assets. The separation and subsequent sale of non-core assets is the most common mechanism for their restructuring. However, this procedure is often delayed, and the sale of the allocated business does not bring the expected income. The fact is that the company often does not realize the need for a professional approach to selling a business. Non-core assets rarely have high attractiveness, therefore, to effectively sell them, it is not enough to simply make a decision and carry out minimal advertising actions. This requires the allocation of a certain financial and human resource to the project, as well as a systematic approach to preparing the transaction.

Development and implementation of measures to increase the value of assets.

Cost estimate. Development of a brief description of the assets being sold. Preparation of an investment memorandum (in case of sale of assets as an operating business). Selection of potential buyers (contractors) and direct communication to them of information about the sale. Carrying out promotional activities (if necessary). Conduct of negotiations. Ensuring that the counterparty conducts an audit of the company (due diligence). Preparation of documents and implementation of the transaction. Depending on the situation and wishes of the Client, our consulting company provides various service packages.
We can provide the entire necessary line - from diagnosing a problem to a pre-sale audit and sale of a non-core asset; also, at the client’s request, we can work only with individual stages of the project - for example, diagnosing an asset or its proper registration. Pre-sale preparation may or may not be included in the package of services for the spin-off of a non-core business.

At the same time, as in any large business process, there can be many pitfalls. And not all of them can be predicted even by an experienced and highly qualified consultant. Nevertheless, some troubles can still be prevented. First of all, our consultants deal with a specific situation, and do not draw conclusions based on generally known facts. They always base their conclusions on their own rigorous analysis of objective data, and on the basis of a large number of expert assessments. They also always focus on the correctness of the calculation methodology and a thorough study of market opportunities for increasing the efficiency of asset use. In most cases, non-core business areas for the company employ real people, and it is not always easy to fire them, and our legal experience helps us with this. We always pay attention to the social and administrative characteristics of the region or city where restructuring is being carried out. After all, restructuring activities are, first of all, working with people who are employed in the production being restructured.

You can, of course, simply separate a non-core area from the main structure of the business and sell it to someone; less often, its further structural use is carried out - leasing or creating a joint venture to operate the facility. But selling an asset is not always easy. The most typical problem for Russian companies when selling a non-core business is difficulty finding buyers due to low profitability or unprofitability of non-core assets. That is why pre-sale preparation of the enterprise often becomes one of the components of the project.

Depending on the chosen strategy, a non-core business can either be sold immediately or undergo certain pre-sale preparation (creating a stable customer base, building an effective management system, developing its own strategy, etc.), the purpose of which is to formulate the potential buyer’s expectations of a stable increase in profitability this business, the presence of which, in turn, will allow him to sell this business for a higher price.
Even after you, in your opinion, have successfully placed an unnecessary unit in good hands, the problems may not end there. For example, being financed by the parent company, the department, whether good or bad, supplied the necessary services. Finding itself left adrift, and with an inexperienced owner, the unit may simply die a natural death. If the parent company still remains a buyer of the services or products of its former part, then its disappearance may be quite painful for the “mother”. Most often, this can happen if the former “mother” of the asset has a monopolist on its services.

When spinning off non-core assets, it is important to understand whether there is a competitive market for the products/services of the spin-off division. If there is no market, that is, the spun-off business unit continues to occupy more than 50% of its segment, selling it to a new owner carries the threat of dependence on the monopolist. In addition, if the new owner is unable to effectively manage the spin-off company, it may go bankrupt and cease operations, making it difficult to replace the products or services it provides.

Also, if the owner is not replaced, that is, the asset simply becomes a separate legal entity, then in the absence of competition, the allocation of the asset occurs only on paper: the allocated business unit remains in fact a structural unit and has no market incentives to reduce costs and improve quality . It may turn out that the consultant’s main task will, in fact, be to create a market for this former “daughter”. For example, if two large companies simultaneously allocate similar non-core assets, then they will then be able to compete with each other in this market, although small in number of participants.

Consulting company "USI"

Many organizations own so-called non-core assets: objects of housing and communal services and the socio-cultural sphere, that is, servicing production and facilities, which include housing buildings, dormitories, subsidiary farms, kindergartens, children's recreation camps, first-aid posts, swimming pools , saunas, etc. And this is not a complete list of what can be included in non-core assets.

Currently, the category of “non-core assets” is found quite rarely in the economic literature, and in regulations, modern accounting and reporting there is no information about non-core assets, since such assets are not mentioned in the current chart of accounts. And those definitions that exist do not provide a uniform understanding of the content of the category “non-core assets”.

For example, some authors believe that non-core assets are assets that are involved in activities that are not core to the organization. Other literary sources consider non-core assets as real estate (buildings, structures) - owned by an organization, shares and shares in companies, health centers, sanatoriums - if the management of an asset does not fit into the business strategy. That is, those assets that are not related to the core focus of the enterprise require costs, but do not bring much profit.

There is also a point of view that the concept of “non-core assets” is identical to the concept of “assets of service industries and farms”. According to regulatory legal acts, to account for service industries and farms, account 29 “Service industries and farms” is intended, which summarizes information on costs associated with the production of products, performance of work, provision of services (consumer services for employees, health, cultural and educational events and etc.) servicing production facilities and farms of the organization, which are its structural divisions.

Based on these definitions, we believe that the concept of a non-core asset is subjective and is associated with the development strategy of the organization, and the assets of service industries and farms represent only an integral part of non-core assets. If the asset in question is involved in the core activity determined by the strategy, then it is core for this owner. Thus, the profile of an asset is determined depending on the owner’s understanding of such assets, the goals and objectives of his activities. And if asset management is not the organization’s business strategy, then such assets become non-core assets.

However, as the definitions of Table 1 indicate, non-core assets should also include, firstly, production assets from which economic benefit is not expected in the future, and, secondly, assets used in activities significantly different from the main one, not related to it technologically and not servicing it.

This study allows us to conclude that non-core assets should be understood as assets for production and non-production purposes, used in the activities of the organization, from which economic benefits are not expected in the future, as well as assets involved in non-core activities that are subject to restructuring.

The study of regulations and economic literature has shown that there is currently no scientifically based classification of non-core assets. And a correctly developed and selected classification of assets will allow accounting and analytical practice to systematize accounting procedures that will most accurately meet the goals set.

Based on the analysis of existing classification approaches, taking into account national characteristics and conceptual provisions, it is proposed to classify non-core assets according to the choice of management strategy. In accordance with this characteristic, two types of non-core assets can be distinguished.

1. Initially acquired non-core assets;

2. Non-core assets subject to restructuring.

Assets of the first group represent integral business units and enable their owner to start a new business. Such non-core assets are initially considered as part of a project and are used strictly in accordance with its development strategy.

The second group includes excess production capacity, social infrastructure facilities, real estate, and service units. All actions with such assets, as a rule, come down to their restructuring. Restructuring is always based on the idea of ​​economic feasibility, i.e. making effective management decisions.

For accounting and management accounting purposes, assets subject to restructuring can be classified by the method of restructuring and by the method of acquisition.

It should be noted that the method of acquisition affects the reflection of non-core assets in accounting and the generated valuation of a non-core asset. As for the methods of restructuring, it is necessary to consider the characteristics of each method in accordance with the goal set for the organization.

For example, in the first method we are talking about departments that are actually necessary for production, where, due to poor management and control, an expensive and low-quality product was produced. If it is possible to reduce the cost and improve the quality of the product, it is better to return the asset to a unified business management system, since transferring assets vital for the main activity to lease or management is very risky.

Outsourcing is based on the fact that when managing non-core assets, third-party organizations and outsourcing companies are involved.

When selling, the price of such an asset is taken into account. If it is high, then it is better to sell it and use the profit received to develop the main production.

In conclusion, it should be noted that the proposed systemic classification of non-core assets will make it possible to link the goals and methods of their accounting with management goals and justify a differentiated approach to identifying and evaluating non-core assets in accounting depending on the management decisions made (sale, development, reprofiling). It is obvious that an individual approach to the assessment of each of the categories of non-core assets we have identified is required.

Literature:

1. Electronic resource. Access mode: http://www.biznesinfo.ru/company-3983/2347.html.– Access date: 03/13/2012

2. Electronic resource. Access mode: http://otvet.mail.ru/question/55772521. - Access date: 03/13/2012

3. On the establishment of a standard chart of accounts for accounting, approval of the Instructions on the procedure for applying the standard chart of accounts for accounting and invalidation of certain resolutions of the Ministry of Finance of the Republic of Belarus and their individual structural elements: resolution: approved. Resolution of the Ministry of Finance of the Republic of Belarus No. 50 dated June 29, 2011.

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The goal of any company is to make profit from its activities. But it often happens that the scope of a company’s activities changes, or new areas of activity appear, or the company can no longer maintain service divisions for some reason. This, in turn, entails the need to attract new assets and resolve the issue of the advisability of further maintaining those whose economic effect is minimal.

What are non-core assets?

Non-core assets are:

• which are not used in the main activity;
• the maintenance and repair of which require costs that significantly exceed the current market value of a similar object;
• which are located in geographic regions that are not strategically important for the company’s current activities;
• which constitute costs for unfinished construction, which the company no longer intends to complete;
• financial investments in shares or authorized capital of enterprises that are currently not related and not important for the company’s activities, etc.

Considering that the maintenance of any property, and especially fixed assets, is associated with certain expenses (repairs, salaries of service personnel, property tax, etc.), if the asset is recognized as non-core, it is advisable to make a decision on the method of release from it.

How to get rid of a non-core asset

There are several options, the most common of which is the sale of non-core assets. This method will only be effective if:

• the property is insignificantly related to the main activity;
• maintenance costs exceed income or economic benefits from its use;
• the property is in demand on the market;
• The company has information about potential buyers for the property.

In accounting, sales are reflected and accounted for on the basis of PBU 6/01 by writing off the residual value of the object from accounting and reflecting proceeds from the sale as other income in an amount equal to the contractual value of the object. All this is formalized with the following entries:

• Dt 01-02 Kt 01-1 - reflects the original price of the sold object;
• Dt 02 Kt 01-02 - the amount of accrued depreciation on the sold object is written off;
• Dt 91 Kt 01-02 - the residual value of the sold property is taken into account in other expenses;
• Dt 62 Kt 91 - the contract price of the property sold is included in other income;
• Dt 91 Kt 68 - VAT is charged on the sale of property.

Another way to make money on a non-core asset is to invest it, for example, as a contribution to an enterprise that is of interest for business development.

For a property contribution, it can be valued at its book value (residual) value or at market value based on an assessment by an independent appraiser. The last option for investment is the most acceptable.

For example, the market price of a non-core asset according to the appraiser’s report was 450,000 rubles. Its residual price is 300,000 rubles. In accounting, the implementation of the deposit is reflected by the following entries:

• Dt 58 Kt 76,450,000 rub. — the financial investment is reflected in the market valuation;
• Dt 76 Kt 01,300,000 rub. — the fixed assets transferred as a financial investment are written off;
• Dt 19 Kt 68 RUB 54,000 — VAT has been restored from the residual value of the transferred fixed assets;
• Dt 76 Kt 91 96 000 rub. — reflects the financial result from investments (450-300-54);
• Dt 76 Kt 19 54,000 rub. — the restored VAT adjusts the calculations and is not included in the cost of the financial investment.

So, to decide whether a particular object is needed for the organization’s activities or not, many factors should be assessed. After all, a non-core business can potentially be involved, but in order to maintain and develop it, significant capital investments are needed. It is these necessary capital investments that need to be assessed in order to understand whether the company is ready to finance the development of a non-core asset.