Net Assets minus Capital Reserve is known as a purchase consideration.
What is a net asset:
- Net assets represent the total value of an organization’s assets minus all its liabilities to outsiders and its own stakeholders.
- Capital employed refers to the amount of money or capital a business organization has invested in order to generate profits.
How to calculate net asset:
- (Total Fixed Assets + Total Current Assets) – (Total Current Liabilities + Total Long Term Liabilities).
How net assets will be denoted?
- When the amount of consideration is less than the value of the net assets available, the difference may be treated as capital reserve.
What is net asset account?
- Net assets are the representation of the difference between assets and liabilities.
- Net worth is what would be left if your company sold all of its assets and paid off all of its liabilities.
