Meaning
Financial documentation generated by a licensed domestic appraisal firm establishes the officially recognized worth of corporate assets during transactions that involve state-owned enterprises or foreign joint ventures. The asset valuation report is required by the State-owned Assets Supervision and Administration Commission to prevent the loss of public assets during restructuring. This document defines the baseline price for equity transfers and stops being the final authority if the transaction is not completed within one year of the assessment date.
Appraisal Standard
National guidelines govern the methodology of the analysis and require the use of income or replacement cost methods. Valuation professionals must execute these calculations based on verified historical books and verified market records. The assessment requires approval from the relevant ministry to prevent underpricing.
Statutory Filing
Regulatory agencies review the submitted documentation to ensure compliance with transaction rules. This filing must be completed before the commerce bureau can approve the equity transfer. If the report is rejected, the transaction cannot proceed.
Operational Boundary
Foreign investors can only execute a purchase within the price range established by the approved valuation. This margin prevents any unilateral discount. The valuation limit expires if the market conditions shift or if the validity period terminates.
