Definition - What does Redundant Assets mean?
Redundant assets can include cash and other marketable securities which have accumulated in a company's balance sheet. They may also include real estate (unless it is a real estate or development company), equipment, or other tangible assets that aren't directly used in the provision of services or goods of the selling company. Any additional non-cash working capital that is in excess of what is required to support the company's revenue would also be a redundant asset.
Divestopedia explains Redundant Assets
A good approach is to review the level of accounts receivable and payable over the last 12 months and compute an average. If the net level at the transaction date is higher than the average, then the excess is redundant and should be kept by the seller or purchased via an increase to the purchase price.
With real estate, it is often more advantageous for the seller to keep it and lease it back to the buyer. This avoids the issue of valuing the real estate as well as realizing on any income tax that would be triggered from selling it. By keeping the real estate and leasing it back, the seller is assured a tenant without having to monetize the equity along with the related tax implications.
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