What are the factors of capital creation?
government assets and their value at the time of evaluation are the main factors of capital creation. The assets are divided into solid assets such as real estate, portable, such as art and antiques and liquid assets such as cash, stocks and gold. The problem of cash as an asset is that governments often spend their budgets. The total value of capital depends on many factors, but is evaluated as part of government accounting. This term is usually used for the government and the intergovernmental economy; However, it was also applied to the company economy. The assessment evaluation is carried out during each accounting period set by the government.
The evaluation is carried out so that the government knows exactly what it has and what is the value of its shares at this point. The results inform government policy, expenditure, sale and the way it manages its investments. Governments that buy or sell Wisely assets are able to add to their capital sums. Capital creation is a process by which governments increase the value of their shares. INLades around the world own huge lands of land from national monuments and offices departments to parks and nationalized hospitals and schools. In times of economic growth, real estate values increase, and therefore without much work, the value of the government held the land.
Governments start the creation of capital by purchasing land in times of economic stagnation when real estate values decrease. At such times they are also able to entertain the soil. Then they are their choice to stick to the ground or sell it. The same principle works for gold. If the price of gold falls, governments can buy more and wait for the price to increase again to make a profit.free land and offices Net get cash for government; Instead, suck money from government budgets for maintenance. In this sense, the government could develop capital creation, but at the same time it could clean cash from its budgets. The balance must therefore be caused between capital formation and profitability. Wek can get money through rent or could be better to sell for a one -off cash payment.
Cash is a liquid asset that rarely counts in the formation of capital. This is because most government cash is earmarked for spending during the fiscal year. Governments therefore tend to hold a lot of money as an asset. Government cash depends on tax revenues or tax revenues. The amount obtained depends on the level of the tax-economic performance that has been affected.
One of the greatest sources of capital creation after property is defense. All military equipment is calculated in the fixed assets of the government that bought them. Their value after purchasing depends on NOCA would be loaded if they were sold, but often calculated on the basis of their purchase price. Many Western governments find that the Ministry of Defense or the Ministry has the largest asset when counting capital.