Restated net asset value (actif net réévalué)

The restated net asset value, or ANR (actif net réévalué), is the standard method for valuing a company whose assets are mostly property, such as an SCI (société civile immobilière, a French property-holding company). The accounts carry the properties at cost less depreciation, a figure that bears little relation to their value after a few years. The ANR corrects this distortion: the book value is replaced by the market value at the valuation date, the other items are adjusted where necessary, and all the debts are deducted. What remains is what the company would be worth if it sold everything and repaid everything.

The ANR is not the value of the shares: it is the starting point. One must then take account of what distinguishes a share from a fraction of a building, through discounts.

Where the rule comes from

No statute imposes the ANR, but it follows from the principle that assets are valued at their real market value, laid down by article 761 of the French General Tax Code for transferred property and adopted by the tax authority in its own valuation guides. The Charte de l’expertise en évaluation immobilière (French property valuation charter, Title II § 8.5) treats the valuation of company shares as a specialism of the property valuer and refers, for the properties themselves, to the definition of market value in Title III § 1.1.

Where the articles of association or an agreement lay down a calculation method, article 1843-4 of the French Civil Code requires the appointed expert to apply it.

In a valuation report

I start from the last approved balance sheet, brought up to date if the valuation date is some way off. I replace the net book value of the properties with their market value, established after an inspection. I check the other assets (cash, receivables, tenants’ deposits received) and the liabilities (loans at their outstanding capital, shareholder current accounts, tax debts, provisions). I consider the latent tax on capital gains, whose treatment depends on the context and the applicable case law. The report presents a clear line-by-line table from the accounting balance sheet to the restated balance sheet.

Example

An SCI taxed under income tax rules shows a building at €380,000 net in its accounts; its market value is €720,000. Cash stands at €15,000, loans at €210,000 and shareholder current accounts at €95,000. The accounting net assets are €90,000; the restated net asset value is €430,000. For 500 shares, the mathematical value per share is €860, before any discount. The current accounts, repayable to the shareholder, are valued separately.

Not to be confused with

Income capitalisation, which values the company by the rents it collects and serves as a cross-check, and the market value of the building itself, which ignores the company’s liabilities.