IMEB 2.2.3 What is a firm's net asset value?

(1) The net asset value of a firm is the amount (if any) by which the total value of its assets exceeds the total amount of its liabilities.
(2) In calculating the total value of a firm's assets, no amount may be allowed for—
(a) goodwill or any other intangible asset; and
(b) tangible fixed assets, including inventories, plant and equipment and vehicles; and
(c) deferred tax assets; and
(d) deficiencies of net assets in subsidiaries; and
(e) debts and other loans owed to the firm by policyholders and other insurance intermediaries, if they are more than 180 days overdue; and
(f) any investment by a subsidiary of the firm in the firm's own shares; and
(g) holdings of other investments that are not readily realisable investments; and
(h) investments in, and loans to, affiliates and related persons.
Note Subsidiary is defined in the glossary.
(3) In calculating the total amount of a firm's liabilities, all contingent liabilities must be taken into account.
(4) In this rule:

affiliate, of a firm, means any entity of which the firm holds 10% or more but less than a majority of the voting power.

related person: a person (the second person) is related to another person (the first person) if:
(a) the first person and the second person are members of the same group;
(b) the second person is an individual who is a director or officer of the first person or of another member of the same group;
(c) the second person is the spouse or minor child of an individual mentioned in paragraph (b); or
(d) the second person is a company that is subject to significant influence by or from an individual mentioned in paragraph (b) or (c).
Amended by QFCRA RM/2014-6 (as from 1st January 2015)