Revaluation of corporate assets extended to 2021 financial statements
The Sostegni-bis decree has extended the possibility to revalue business assets in the 2021 financial statements of OIC adopters with respect to assets that have not been revalued in the 2020 financial year.
The extension recalls the regulations provided by the August Decree which allowed:
- to revalue a single asset without the obligation to revalue all assets belonging to the same “homogeneous category”;
- to choose between a free revaluation for statutory purposes or a paid revaluation for tax purposes;
- in the case of revaluation also for tax purposes, the recognition of higher deductible depreciation starting from the year following the one in which the revaluation was performed by paying a 3% substitute tax.
The new window opened on the 2021 Financial Statements, does not allow to exercise the option for the fiscal recognition of the higher values, resulting in a revaluation with only civil effect.
Revaluation only for statutory purposes is free of charge and generates a double binary, between the book value of the asset, which will be increased by the allocation of the capital gain that emerged, and the value recognised for tax purposes of the same, which will be in “continuity” as if the revaluation had never occurred: on this civil-fiscal mismatch it will be necessary to record in the 2021 financial statements the deferred tax provision as a reduction of the revaluation reserve recognised in equity.
If one wishes to obtain tax recognition of the higher values also in the 2021 financial statements, it will be possible to use the “ordinary” revaluation regime introduced by the 2020 Budget Law, which allows, through the payment of a substitute tax of 12% (for depreciable assets), to align the tax values to the book values: in this case the option is more onerous than that proposed by the August Decree, and is also less advantageous because the recognition of the higher deductible depreciation will start from the third year following the year in which the revaluation was performed.
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The benefits of revaluation for Innovative Start-ups
The revaluation of company assets represents an opportunity to adjust the values of assets in the balance sheet to their real economic value: innovative start-ups are among the recipients of this opportunity, as they are companies characterised by the fact that their corporate purpose has a high technological value and a high potential of assets, especially intangible assets, which represent the real latent value of the company itself. For example, trademarks, patents and software recorded in the financial statements at purchase or production value but having a much higher intrinsic value, or simply company know-how, if it is legally protectable under the provisions of the Industrial Property Code.
The revaluation of these assets allows start-ups, which by corporate genesis are at the beginning of their life cycle, to obtain the following advantages:
- Improving rating indicators for access to bank credit: the increase in net assets through the allocation of the revaluation asset balance allows for a significant increase in balance sheet values and equity strength, thus obtaining more advantageous conditions in relation to the granting of loans not only by banks but also by private investors;
- Attracting new investors: this is the context of Crowdfunding, a bottom-up financing process that takes place through accredited online platforms, through which individuals who lack the resources to realize their business idea can raise public funds. For the promoter, the presentation of a balance sheet with revalued values allows for greater appeal in the eyes of potential investors, both if the aim is to find financial resources in the form of loans, but especially if the objective is to find risk capital, i.e. people willing to acquire a stake in the company’s capital;
- Recapitalising the company: in the current context of economic crisis, revaluation only for statutory purposes makes it possible to generate a reserve in the assets that is not in tax suspension and that can be used to cover past or future losses. The allocation of the revaluation surplus allows a zero-cost recapitalisation in order to avoid the dissolution of the company or other extraordinary changes.
The possibility to revalue also Intangible assets nor recorded in the Fixed Assets
With regard to the business assets eligible for revaluation, the Italian Accounting Standards Board (“OIC”) has clarified that intangible assets that have already been recognised as assets may be revalued, as well as intangible assets whose costs have not been capitalised in the balance sheet, but charged entirely to the income statement, provided that they are potentially legally protectable: if this were not the case, there would be a disparity in treatment between companies that have decided to recognize the costs in the income statement and those that, all other things being equal, have decided to capitalise them. This is also the opinion of the Italian Revenue Agency which, with its latest ruling of 8 April 2021, has aligned itself with the position of the OIC. This latest response comes after a series of previous preclusive positions on this possibility, which had generated perplexity among operators.