Adverse Financial Asset Evaluation

In the 1990s, large amounts of national commercial banks' non-performing assets impacted the financial security. The government has established four Assets Management Companies to take over national commercial banks' non-performing assets. The aim was to achieve the system reformation of national commercial banks through disposing these financial non-performing assets.Along with the financial system reformation and financial non-performing assets disposition, financial non-performing assets appraisal has developed. The Guidance of Financial Non-performing Assets Appraisal has been enacted. The assets appraisal industry and AMC have developed the theories of financial non-performing assets appraisal and done enough practice. These successful experiences have played most important affects which directed disposition pricing and supervised disposition and weighted disposition effect. But currently financial non-performing appraisal system is outdated. It hasn't been adaptable for financial non-performing appraisal in future. It just considered financial factors which affect the value of financial non-performing assets; it didn't consider non-financial factors which also affect the value of financial non-performing assets. And it takes the static state value of equity as price basic of the transformation from creditor's rights to equity, which ignored the development trends of the enterprise's future management and underestimates the real value of equity which transformed from creditor's rights.Firstly, this paper analyzed the components of financial non-performing appraisal system and discussed the limitation of the system. Secondly, it advanced what the system supposed to be in future. According with the practice, this paper integrates appraisal practice with theories and sets different models to discover influence of non-financial factor to the value of financial non-performing assets and the real option value of financial non-performing assets.This text introduced the research background, research object and range of research of the article firstly. In the meantime, the author combines the domestic and foreign research present condition to provide the foundation of the research. Secondly, the author elaborates the appraisal system of financial non-performing assets, which include appraisal purpose of financial non-performing assets, appraisal object, and value type and appraisal methods. Thirdly, the author discussed the limitation of the system, and redefined the appraisal object. It emphasized the marketability of asset appraisal and how to choose the value type.The textual core contents include value analysis research of financial non-performing assets according to repayment will and control option value analysis research of equity which transformed from creditor's rights according to the real option thoughts. In the value analysis research of financial non-performing assets, the author use AHP method estimate non-financial index's influence to financial non-performing assets' value. In the control option value analysis research of equity, the author analyzed control option value of equity which transformed from creditor's rights and establishes to set appraisal model. The author combines with some evaluation cases to illuminate these theories effects.