Give full play to the basic role of asset appraisal.
I. Bank Restructuring and Assessment of Non-performing Financial Assets Disposal
2004-2005 was the year of financial reform in China. China Construction Bank, China Bank and China Industrial and Commercial Bank have successively completed restructuring, introduced strategic investors, and changed from state-owned sole proprietorship to joint-stock commercial banks. A number of professional and regional commercial banks, such as Shenzhen Development Bank and Bank of Communications, also seek to enhance their core competitiveness and maximize their growth and value by transferring equity and introducing international strategic investors. The four major asset management companies speed up the disposal of financial non-performing assets in order to complete the asset disposal within the time limit stipulated by the state. After the reorganization, the banks have intensified the disposal and recovery of mortgaged assets to further improve the quality of assets. On July 19, 2005, Huang Ju, Vice Premier of CPC The Politburo Standing Committee (PSC) and the State Council, delivered a speech at the Third National General Meeting of China Assets Appraisal Association, pointing out that we should give full play to the role of professional market intermediary industry in the financial system reform, guard against financial risks and standardize the operation of capital market.
In this process, evaluation has played a basic pricing function in the disposal of credit assets, financial non-performing assets and mortgage assets, and has played a positive role in promoting financial system reform and bank mergers and acquisitions.
1. Risk loss estimation of credit assets
Accounting treatment of loans and provision for bad debts are the basic elements of bank management and risk control. Since 2002, banks have fully implemented asset risk classification management. The Guiding Principles of Loan Risk Classification issued by the People's Bank of China requires that the quality of bank loans be classified based on risk, that is, loans are classified into five categories: normal, concerned, secondary, suspicious and loss, and managed by classification. In 2002, the People's Bank of China issued "Guidelines for the Provision of Bank Loan Losses", requiring all commercial banks to fully implement the five-level classification management of loan quality and timely and fully withdraw all kinds of loan loss reserves.
However, due to historical and institutional reasons, domestic commercial banks did not reveal the risks of bank loans in time, and bank assets were not accounted and reflected according to their actual values, and there were a corresponding number of book "virtual assets". In 2004, China Construction Bank, China Bank, and China Industrial and Commercial Bank successively completed the assets appraisal after reorganization and restructuring. In the evaluation process, we draw lessons from the international evaluation experience of such assets, creatively verify the correctness of the "five-level classification" by means of verification, and evaluate the risk loss according to the internationally used "discounted cash flow" (referred to as "DCF") and "migration model" (referred to as "MM"). It effectively reveals the risk degree of bank loans, and enables bank assets to be accounted and reflected according to their actual values, which has been recognized by investors at home and abroad.
The appraisal of China Construction Bank, China Bank and China Industrial and Commercial Bank is by far the largest asset appraisal project in the world. From the perspective of financial system reform and financial mergers and acquisitions, the evaluation practice of the three major banks has accumulated evaluation experience for bank credit assets and effectively promoted bank joint ventures and mergers and acquisitions.
2. Assessment of the realized value of debt-paying assets
In 2005, asset appraisal played an unprecedented role in debt repayment and its disposal, especially in the asset appraisal of debt repayment. Some new breakthroughs have been made in methods and practices, and a feasible way has been found for reasonably evaluating the value of debt-paying assets. Paying debts with assets is an important way for creditors (financial or non-financial institutions) and debtors (or guarantors or responsible third parties) to restructure debts through agreements or court rulings and deal with the relationship between creditor's rights and debts. The main ways of paying debts with assets are as follows: after negotiation between creditors and debtors, an agreement of paying debts with assets is signed, and the creditors obtain the ownership or disposal right of the debt-paid assets; Creditors obtain the ownership or disposal right of collateral (pledge) through consultation; Ownership or disposal right of debt-paying assets obtained by court ruling, mediation or arbitration institution ruling; Ownership or disposal right of debt-paying assets obtained after liquidation according to law. The assets commonly used by debtors to pay off debts mainly include inventory, short-term investment, fixed assets, long-term investment and intangible assets, which can be divided into real estate, chattel, intangible assets and investment assets according to asset forms. The evaluation of debt-paying assets needs to make a breakthrough in value types, property rights and investigation restrictions. In 2005, the Guiding Opinions on the Evaluation of Non-performing Financial Assets issued by China Assets Appraisal Association created favorable conditions for the evaluation of debt-paying assets.
First of all, it breaks through the single market value type in value type, which provides a practical basis for reasonably revealing value. Value type refers to the value attribute and its manifestation of asset evaluation results. The appraisers reasonably select and determine the value type of this appraisal according to the specific purpose of the appraisal, the functional status of the appraised assets and various situations in the appraisal process. Although the importance of value type research is self-evident, due to the lack of understanding of this concept in the field of evaluation, relevant operational norms have always avoided this issue. International experience shows that the definition of value type or value definition should be the basic premise to determine the evaluation method. International appraisal standards clearly point out that the types and definitions of value need to be adapted to the specific appraisal business, and the change of value definition will have a substantial impact on the valuation of various assets. The promulgation and implementation of the Guiding Opinions on the Evaluation of Non-performing Financial Assets has clarified the rational use of value types in the evaluation of debt-paying assets, and provided a basis for adopting the realized value (non-market value) evaluation of such assets.
Secondly, in terms of asset property rights, the particularity of the property rights of debt-paying assets is solved through full disclosure. It is the responsibility of appraisers to properly handle and disclose the impact of asset defects and lack of evaluation data on the evaluation results. Due to the strict requirements of relevant government laws and regulations on property rights, property rights problems have been puzzling appraisers. In 2005, there was a new breakthrough in the disclosure and disclosure of property rights in the field of asset evaluation and the disposal of debt-paying assets. For example, in the evaluation of debt-paying real estate, there are many cases of incomplete property ownership certificates. If the debtor actually has the right to control the mortgaged real estate, then the debtor will issue a letter of commitment, and the evaluation agency can confirm the "unlicensed" real estate owned or controlled by the debtor according to the principle that substance is more important than form, and evaluate it on the premise that the debtor can handle the legal property right certificate, and at the same time draw the attention of creditors and related parties at that time as a major issue in the report, thus solving the limitation of property right definition on evaluation.
Thirdly, due to the complexity of reasons and disputes, the evaluation and investigation of debt-paying assets are often restricted, and the entrusting party and the evaluating party are often helpless. The Guiding Opinions on the Evaluation of Non-performing Financial Assets puts forward the concept of value analysis. In the case that due to the limitation of due diligence, it is impossible to issue an asset appraisal report, value analysis based on experience and analysis can be used more to serve the asset merger and acquisition business to the maximum extent.
3. Assessment of disposal of non-performing assets (non-performing loans)
Non-performing financial assets are a worldwide problem. Due to the internal risks that banks can't overcome and the influence of external environment, non-performing loans generated by commercial banks are a common international problem. Especially during the severe financial crisis in the 1990s, the non-performing loans of all countries in the world were very serious. On average, the proportion of non-performing loans in developed countries is about 10%, that in developing countries is about 20%, and that in countries in transition is 30-50%. Non-performing loans pose a serious threat to banks themselves, national finance and social stability, and governments all over the world pay great attention to them and take timely measures to solve this problem.
Due to historical reasons, China's commercial banks have accumulated a huge amount of non-performing loans, which has seriously affected financial security and financial order. In order to deepen financial reform, prevent and resolve financial risks, and promote the sustained, healthy and rapid development of the national economy, the China Municipal Government has established four wholly state-owned financial asset management companies, divesting some non-performing loans of commercial banks to asset management companies for centralized management and disposal, and defining the business objectives of preserving assets to the maximum extent and reducing losses. In 2004, the State Council approved the target responsibility system plan of the Ministry of Finance for asset companies, requiring that all creditor's rights assets of asset companies be disposed of before the end of 2006. In 2005, the pace of disposal of non-performing assets accelerated. According to the statistics of China Banking Regulatory Commission, as of September 30, 2005, four asset companies * * * disposed of 736.6 billion yuan of non-performing assets, accounting for 59% of the total non-performing assets acquired; Accumulated cash recovered was 654.38+0.55 billion yuan, accounting for 265.438+0% of the disposal of non-performing assets.
Different from the evaluation of general assets, there are many difficulties in the evaluation of financial non-performing assets. From the practical point of view, its difficulty is mainly reflected in: scattered assets, small scale and high evaluation cost. Take China Great Wall Asset Management Company as an example. Its assets are scattered and small in scale. All assets are distributed in 30 provinces and cities across the country, and most of them are distributed in towns below the county level, accounting for more than 80% of the total number of households. The total assets are 345 billion, with nearly 2 million households. The average amount of each household is less than 6.5438+0.8 million yuan, and the number of households with assets less than 6.5438+0.8 million yuan accounts for more than 80% of the total number of households. The ownership of assets is unclear and the property right foundation is insufficient. Still taking China Great Wall Asset Management Company as an example, the assets of Great Wall Asset Management Company are mostly agricultural loans, followed by loans from collective enterprises and township enterprises. Most of these customers' debt repayment assets are houses, land use rights and machinery and equipment. However, due to the imperfection of real estate registration in China, especially in rural areas, the level between regions is uneven, and it is very common that legal housing ownership certificates and land use certificates are not handled. The purpose of evaluation is special, and the contradiction between evaluation value and disposal realization is very prominent. Measuring assets in the form of value can have many types of meanings, that is, value types, which reflect the value characteristics of assets from different angles. Different asset businesses (that is, appraisal purposes) need different types of values, and these values with different meanings are different in quality and quantity. Non-performing assets managed by financial asset management companies are different from other assets for the purpose of quick realization. The disposal value of such assets is not only affected by the quality of the assets themselves, but also to a great extent by the special market supply and demand situation of financial non-performing assets and various disposal factors. How to consider these special factors, accurately choose the evaluation value type and make a scientific and reasonable evaluation is another difficulty faced by asset evaluation. Asset management companies often encounter the situation of auctioning assets according to the appraisal value, and the contradiction between appraisal value and liquidation is very prominent.
The evaluation of non-performing assets puts forward special requirements for the professional ability of appraisers and challenges the current evaluation norms, but overall, the evaluation has played a positive role in the disposal of non-performing assets. Evaluation is the pricing basis of various disposal methods. The disposal of non-performing assets by financial asset management companies involves different economic entities, and the disposal process is essentially a process of interest division among different economic entities, and the measurement of interest division should be based on value evaluation. According to the Measures for the Administration of Asset Disposal of Financial Asset Management Companies issued by the Ministry of Finance, when a company disposes of assets by means of debt restructuring, debt-to-equity swap, sale and lease, in principle, it should first be appraised by a legal and independent appraisal agency, and the discount and reserve price should be determined through consultation according to the appraised value, and the fair value of the recovered assets should be reasonably assessed according to law. In addition, the implementation of franchising and recovery, we must first assess the solvency of enterprises, as the basis for franchising. It can be seen that any disposal scheme must be based on evaluation, and disposal is not allowed without reasonable evaluation. In the whole process of non-performing assets disposal, evaluation is the premise and foundation, and it is an indispensable and important basic link in the asset disposal procedure.
Evaluation has also become an important means to prevent moral hazard. Financial risks are everywhere in the financial market and have different forms of expression in various fields. The asset disposal of financial asset management companies is mainly the market risk and moral hazard in the transaction process. China's asset management companies have been established for a short time, have little experience, have special tasks and status, and lack a well-designed legal environment and a sound market. If a fair and reasonable price is not determined, it will be difficult for creditors and debtors to negotiate directly to avoid insider trading. In this sense, asset management companies guard against moral hazard more than other risks, and fair value disposal of assets requires creditors, debtors and intermediaries to have a good sense of social responsibility and moral self-discipline.
2005 is a year when the evaluation of financial non-performing assets moves towards standardization. On June 5, 2005, the Ministry of Finance and the China Banking Regulatory Commission issued the Notice on Standardizing the Asset Appraisal in the Disposal of Non-performing Assets of Asset Management Companies, which stipulated that asset appraisal institutions and certified asset appraisers should strictly abide by the Guiding Opinions on Financial Non-performing Assets Appraisal issued by China Asset Appraisal Association and standardize the practice of non-performing assets appraisal. The asset appraisal industry and the four major asset management companies have conducted in-depth exploration in the theory and practice of financial non-performing assets appraisal, and summarized many successful experiences, which played an important role in ensuring the smooth disposal of financial non-performing assets.
Second, the evaluation and pricing of mining rights in mergers and acquisitions of energy enterprises
Stimulated by the rising oil and energy prices, resource assets have become the focus of mergers and acquisitions. In 2005, in the global M&A case, the mining industry was second only to transportation and banking. According to statistics, before 2005 10 months, active M&A transactions were mainly concentrated in communications, banking and mining, and the total M&A transactions of mining enterprises reached 223.233 billion US dollars.
Global industrial mergers and acquisitions in 2005
In China, M&A of coal enterprises flourished, which became the most unique M&A landscape in China in 2005. Following the reorganization and listing of Shenhua Group, Black Coal Group and China Coal Group, a number of large state-owned energy enterprises have stepped up their merger and acquisition activities of local coal mines, and private capital has also invested in coal mines. In the merger and acquisition of coal enterprises, the evaluation of mining rights has become a hot issue.
According to the Land and Resources Bulletin of the Ministry of Land and Resources, in 2004, a total of 42,589 exploration licenses and 42,589 mining licenses were issued nationwide, and the bidding, auction and listing of exploration rights were carried out, and 6 14 exploration rights were sold at a transfer price of 702 million yuan. Twenty-eight provinces (autonomous regions and municipalities directly under the central government) carried out the bidding, auction and listing of mining rights, and sold mining rights 13390 cases at a price of 4.299 billion yuan.
Mining right is a general term for exploration right and mining right. Mining right, as a kind of property right, refers to the right to mine mineral resources and obtain the mined mineral products within the scope stipulated in the mining license obtained according to law. Exploration right is a kind of property right, which refers to the right to carry out exploration within the scope stipulated in the exploration license obtained according to law.
Mining right management is the core content of mineral resources management, and it is the basic requirement for the State Administration of Mineral Resources to realize all the rights and interests of national mineral resources and protect the legitimate rights and interests of mining rights holders. Due to historical reasons, under the planned economy system, China's existing geological prospecting units and mining enterprises are often granted mining rights and exploration rights free of charge by the state, but they are not treated as assets, let alone the owners of mining rights and exploration rights. After the revision of the Mineral Resources Law of People's Republic of China (PRC) (1996), the clauses that mining rights cannot be transferred were deleted, and the relevant provisions on paid acquisition and legal transfer of exploration rights and mining rights were added. Later, 1998, the State Council issued three supporting administrative regulations, which refined the above legal principles and made operational provisions, legally affirmed the property and commodity attributes of mining rights, and also affirmed the use value and exchange value of mining rights.
Paid acquisition of mining rights is a common practice in many countries in the world today. Mining right evaluation is an organic part of mining right transfer. According to the current laws in China, the assignment and transfer of mining rights funded by the state must be evaluated according to law, and the evaluation results must be confirmed and filed. Since the implementation of the "three supporting regulations" from 65438 to 0998, the evaluation of mining rights has made great progress, which has played an extremely important role in the mining rights market and attracted widespread attention in the field of mergers and acquisitions.
According to the Measures for the Administration of the Transfer of Exploration and Mining Rights and the Interim Provisions on the Administration of the Transfer of Mining Rights of the Ministry of Land and Resources, the transfer of mining rights shall be carried out by the competent department of geology and mineral resources of the people's government at or above the county level within the authority stipulated in the Measures for the Administration of the Registration of Mineral Resources Exploration Blocks, the Measures for the Administration of the Registration of Mineral Resources Exploitation and the administrative measures formulated by the standing committees of the people's congresses of provinces, autonomous regions and municipalities directly under the Central Government. The scope of transferring mining rights can be mineral land invested and proved by the state, mineral land nationalized according to law and other blank mining rights. The competent departments of geology and mineral resources at all levels shall entrust an evaluation institution with the qualification of mining right evaluation recognized by the competent department of geology and mineral resources of the State Council to evaluate the mining right when transferring the mining right of the state-funded exploration and proven mineral land in accordance with the statutory authority.
For mining enterprises, the source of profit is mineral resources, and investors are not concerned about the tangible assets of mining enterprises, but the investment cost of mining rights, which makes the pricing of mining rights in mergers and acquisitions very sensitive, and mining rights appraisers play a very important role in this field. At present, in the process of shareholding system reform of state-owned mining enterprises, the pricing disposal of mining rights has formed a relatively standardized procedure and method. Whether the joint-stock company directly obtains the mining right by transfer, or the group company obtains the mining right first and then transfers it to the restructured joint-stock company, the mining right evaluation must be priced and included in the transaction scope.
After the Spring Festival in 2005, Shenhua Group Co., Ltd., the largest coal enterprise in China (hereinafter referred to as Shenhua Group), entered the sprint stage of listing. What assets will be listed by this coal group with total assets exceeding 654.38 billion yuan and ranking fifth in the world has become the focus of investors' speculation. Shenhua Group will divest 13 companies mainly engaged in coal mining and supporting business from more than 40 subordinate companies and put them into the newly established Shenhua Energy Co., Ltd., and how to price assets has become the focus of investors' attention. The biggest selling point of mining listed companies is their mining rights, that is, the mineral resources represented behind this right-how much is the most concerned by investors and regulatory authorities, which has also become a focus of investor speculation. The preliminary evaluation results of 29 mining rights by the evaluation institutions are about 5 billion yuan, which is the largest mining rights evaluation case and the largest mining rights transfer in China coal industry. According to the relevant regulations of the Ministry of Finance and the Ministry of Land and Resources, this mining right worth 5 billion yuan is included in the assets of Shenhua Group as state capital.
In the field of debt-to-equity swap and share repurchase, the valuation of mining rights is also an important basic transaction. Jiangxi Salt Mine, a key enterprise in Jiangxi Province, invested more than 50 million yuan with its mining right in Jiangxi Salt Mine Co., Ltd. in the process of debt-to-equity swap, which became the first case in which the mining right price was converted into state capital in the debt-to-equity swap of Chinese enterprises. Dexing Jinshan Gold Mine, the largest gold mine in Jiangxi Province, cannot be expanded and rebuilt on a large scale because it cannot raise funds. The enterprise mortgaged the mining right to the bank at a price of 65.438+0.4 billion yuan, and obtained a loan of 0.35 billion yuan, which was invested in the mine expansion, and the business situation of the enterprise was improved.
Three, determine the fair value of enterprise assets in the asset appraisal.
The Accounting System for Business Enterprises applies impairment accounting to the final measurement of fixed assets for the first time. The Accounting Standards for Business Enterprises-Fixed Assets promulgated by the Ministry of Finance requires enterprises to check their fixed assets at the end of the period. When tangible or intangible losses such as substantial depreciation, functional depreciation or economic depreciation occur to fixed assets, the recoverable amount of fixed assets should be calculated to determine whether the fixed assets are impaired.
The final revised draft of International Accounting Standards-Factory Equipment, which came into effect in 2005, changed the wording of "normal market value" to "... fair value is usually determined by appraisers with professional qualifications by analyzing market data." This is another major revision made by the International Accounting Standards Board after changing the stipulation that "fair value is the currently used market value" in the original International Accounting StandardsNo. 1. "Fair value is usually market value" in 16 to 198. This change has raised the role of evaluation to a new height. On June 5438+ 10, 2004, the International Appraisal Standards Committee issued the Letter for Comments on Assets Appraisal of Financial Reports, discussing whether and how to modify the international appraisal standards accordingly. The International Evaluation Standards Committee believes that the change of IAS 16 will lead to the diversification of fair value, and two types of values may be adopted in the evaluation business for the purpose of financial reporting, namely market value and sustainable use value. The Committee of International Appraisal Standards will recommend necessary adjustments in the process of revising International Appraisal Standards 2003, and revise the Application Guide of International Appraisal 1- Financial Reporting Appraisal accordingly. After the implementation of international accounting standards by all listed companies in the European Union in 2005, the evaluation business for the purpose of financial reporting will be regularized, which will bring great opportunities to appraisers. At present, some companies in Denmark have implemented fair value accounting, and appraisers have begun to provide evaluation services for financial reporting.
The Financial Accounting Standards Board (FASB), which has been keeping a distance from the International Accounting Standards Board, has also faced the pressure from the capital market and the securities market because of accounting scandals such as Enron incident, and began to promote the integration of American GAAP with international accounting standards, and gradually adopted and applied the concept of fair value, and made relevant provisions in the accounting standards for goodwill and corporate mergers and acquisitions. The Decision on Fair Value Valuation points out that one principle of fair value valuation is that "the estimation of fair value should be based on the results of evaluation technology, which should absorb market information from active markets as much as possible, even if the measured assets (liabilities) are not traded in active markets ... In short, the more market information is absorbed, the greater the reliability of fair value estimation." The above changes have had a great impact on the evaluation industry in the United States. The major evaluation associations in the United States have joined forces to actively communicate with accounting, legislation and related economic departments, and strive to promote the cooperation between the evaluation industry and the accounting industry.
With the efforts of the Royal Institute of Chartered Surveyors, the European Commission put forward a proposal to amend the laws on capital requirements of banks and investment companies. The proposal recognizes the importance of evaluation as one of the risk management tools of banks and makes it a mandatory requirement for the first time. The proposal further suggests changing the definition of market value to be consistent with the definition of the International Appraisal Standards Committee, and requires banks to evaluate the value of their commercial real estate every year. The proposal was adopted in the European Parliament on 6-4 July 2004.
A number of overseas listed companies, such as China Petrochemical, China Petroleum and China Mobile. , has reached the time limit for revaluation stipulated by international accounting standards, and its fixed assets need to be revalued according to the regulatory requirements of the listing place. In 2004-2005, China appraisers completed the revaluation of fixed assets of overseas listed companies such as China Petrochemical, China Petroleum and China Mobile. Listed companies in Shenzhen and Shanghai stock markets apply impairment accounting to the final measurement of fixed assets to varying degrees when implementing the Accounting System for Business Enterprises. Appraisers play an increasingly important role in the final measurement of fixed assets to determine the fair value of enterprise assets.