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Decrease in Asset Value, where does it come from?

Posted: Tue Jun 19, 2018 4:39 pm
by Gorillatore
The last year I've had red numbers in Asset Value. The previous years I was in positive numbers, where could this negative in value come from?

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Re: Decrease in Asset Value, where does it come from?

Posted: Wed Jun 20, 2018 2:02 am
by chengtsai
Likely due to a deflation!! It can also happen when you destruct a building or sold a property for less than its worth.

Re: Decrease in Asset Value, where does it come from?

Posted: Thu Jun 21, 2018 1:30 pm
by colonel_truman
For what I know, when you get rid of a building the change in value is reflected in the "write-offs".

The change in asset valuation is just that. Asset valuation serves the bank (and investors) to know how valuable is your firm, in case you want to monetize your assets. But this is a "perception of value".
In this case it should be a decrease in the value of your property, but it doesn´t affect your working capital, like "stock return" doesn´t: just measures how much your paper stocks are worth, but you haven´t sold them.
As Chengtsai said, deflation can be the cause, or just that your land assets have become less enticing to the "market".

Re: Decrease in Asset Value, where does it come from?

Posted: Fri Jun 29, 2018 3:29 pm
by Gorillatore
After reading your comments I've an inkling. Not long ago I purchased a TV Station for about $300m. Although I've made it generate 5x revenue, it's possible that it's devalued and causing the problem. I wonder how I could find out if this hypothesis is true?