What are Unrecorded Liabilities?

Hidden liabilities generally refer to debts that are not recorded on the balance sheet, but that have manifested over time or have changed due to certain factors. This explicit manifestation of debt may cause a gradual decline in corporate profitability over a long period of time, and may also result in a sudden loss of corporate assets in the short term.

Hidden liabilities

Hidden liabilities generally refer to debts that are not recorded on the balance sheet, but that have manifested over time or have changed due to certain factors. This explicit manifestation of debt may cause a gradual decline in corporate profitability over a long period of time, and may also result in a sudden loss of corporate assets in the short term.

Chinese name

Hidden liabilities

Loss

Sudden loss of corporate assets in the short term

Features

Not recorded on the balance sheet

Flashing factor

Over time, etc.

Hidden liabilities are those that are not regulated by law or government contract, but because of public expectations or political pressure, the government must assume moral or expected responsibilities. For a long time, China implemented

From the market environment

From the market environment, because

When the market, technology, and social environment are constantly changing, if the company cannot adapt to or keep up with changes in the external environment, it will generate a series of hidden (or potential) liabilities. Although this debt has not actually occurred on the surface and cannot be accurately measured in currency, it has been implicitly lurking in the body of the enterprise and is constantly changing.

Implicit liabilities are relative to explicit liabilities because

Produced based on corporate traditions

This tradition can be stipulated by the enterprise's system or it can be implemented without implementation. For example, most of our state-owned enterprises

Hidden liabilities are concealed and often drag a healthy company into the mire. U.S. General Motors is currently in rumors of bankruptcy, and bonds have been downgraded by institutions such as Moody's. Falling into today's predicament has a lot to do with GM's huge medical burden. Back more than 20 years ago, the then CEO and the union reached an agreement that wages remained stable, but medical expenses were borne for employees. The increase in medical expenses exceeded expectations, making it difficult for GM to extricate themselves.

Accidents often cause hidden liabilities to erupt early. At the end of 2005, after the Jilin Chemical accident, the government's awareness of environmental protection rose. When Guangdong Province found that the water quality of Beijiang River was contaminated, it closed the factory of the listed company Zhongjin Lingnan in Shaoguan City. If it was not renovated, the factory might be permanently closed. Today, the prices of many steel stocks are lower than net assets, which has a lot to do with investors' expectations of hidden liabilities.

Ignoring hidden liabilities can cause the acquirer to lose the entire deal. A well-known case is the acquisition of an asbestos manufacturer in the United States by ABB, which was insufficiently prepared for consumer lawsuits. In the end, consumers' claims were burned and they had to be sold at low prices.

Business bankruptcy

U.S. General Motors is currently in rumors of bankruptcy, and bonds have been downgraded by institutions such as Moody's. Falling into today's predicament has a lot to do with GM's huge medical burden. Back more than 20 years ago, the then CEO and the union reached an agreement that wages remained stable, but medical expenses were borne for employees. The increase in medical expenses exceeded expectations, making it difficult for GM to extricate themselves.

Accident

Accidents often cause hidden liabilities to erupt early. At the end of 2005, after the Jilin Chemical accident, the government's awareness of environmental protection rose. When Guangdong Province found that the water quality of Beijiang River was contaminated, it closed the factory of the listed company Zhongjin Lingnan in Shaoguan City. If it was not renovated, the factory might be permanently closed. Today, the prices of many steel stocks are lower than net assets, which has a lot to do with investors' expectations of hidden liabilities.

Implicit liabilities are neither off-balance sheet liabilities nor contingent liabilities. Although implicit liabilities, like off-balance sheet liabilities and contingent liabilities, are not listed on the balance sheet.

Off-balance sheet liabilities generally refer to

Hidden liabilities mainly come from

While some enterprises are facing challenges from the external environment and internal conditions, business leaders stand at a strategic height, grasp the dynamic information of market demand in a timely manner, fully mobilize internal resources of enterprises, and provide products and services required by the market; The cultivation and introduction of talents provide new momentum for research and development of new technologies, and provide a stamina for the development of enterprises. They also create conditions for enterprises to build brands, lead market trends, and transform hidden liabilities of enterprises into obvious benefits.

Entrepreneurs should stand at a strategic level, look at the overall situation and plan

In modern society, enterprises have become the most active market players, and the strategic thinking of leaders is crucial. Their behavioral orientation has a decisive effect on the survival and development of enterprises. The competition of an enterprise in the market is, in a certain sense, the competition of strategic wisdom of business leaders. The external environment and internal conditions of each enterprise are different, and in the practice of operation, the external environment and internal conditions are constantly changing. Enterprise leaders should analyze and study how the company's business strategy can actively adapt to the external environment and make it The strategy changes accordingly as the external environment changes.

The essence of enterprise operation is to solve the dynamic balance of the external environment, internal conditions and business objectives of the enterprise under such complex and changing internal conditions and situations. Enterprise decision makers should adjust the internal resources of the enterprise according to the situation and changes of the external environment, and achieve a coordinated balance of internal environmental conditions through correct and effective business strategies, so as to achieve corporate goals. Therefore, enterprises should adjust marketing strategies according to market changes, adjust product strategies according to changes in consumers, keep up with the pace of the times as much as possible, and meet consumer needs. In terms of talent technology, we should consider strategically and actively cultivate and introduce talents. Strengthen the independent innovation ability, make the company's technology in the market leading position, and establish brand awareness, so that the company's products lead the market trend, so as to obtain excess profits, so as to turn hidden liabilities into explicit benefits.

Timely grasp market demand competition and mobilize internal resources of the enterprise

The external market environment of an enterprise is constantly changing. Risks and opportunities coexist. Only timely collection, transmission, processing, and processing of market demand and competition information can enable an enterprise to keep abreast of market trends and follow the market's tempo to improve its competitiveness.

First of all, it is necessary to capture information on changes in market demand in a timely manner, understand and analyze customer information on the prices, quality, functions, structure, packaging, and after-sales service of our products, and timely feedback to the enterprise's information processing center;

Secondly, companies must fully grasp market technology information, especially the technological research progress, scientific research results, and technical content of currently sold products in the same industry at home and abroad. What are the gaps in the technical aspects of the company's products compared with advanced technologies in the same industry? And work hard on the introduction of technology and talents;

Third, combine the external information of the enterprise with the internal resources of the enterprise, coordinate and unify the thoughts and actions of various people in various departments and links in the enterprise through information transmission and exchange, and conduct advanced product, technology, and technological process with advanced manufacturers. Contrast, find gaps, find solutions and ways, and always stay at the forefront of the market.

Talent training, introduction and technology innovation strategy

In today's world, the economic benefits of enterprises have shifted from simple extensional reproduction to connotative expansion, that is, from the original increase in the number of physical production factors such as means of production and labor to the improvement of physical production factors through technological innovation. Quality, improve the quality and performance of the product; increase the technological content and added value of the product, reduce its material consumption in the manufacturing process, and improve the competitiveness of the product.

Establish enterprise scientific and technological information network, strengthen scientific and technological investment, and independently innovate core technologies of enterprises

Enterprises need to survive in the market competition and grow stronger, and they should be well informed about the development status of related science and technology, especially the dynamic information of the frontier of science and technology should be tracked in time. Therefore, establish an enterprise science and technology information network, understand and grasp relevant scientific and technological information in a timely manner, and store and accumulate to serve enterprise technology research and development. The research and development of enterprise core technologies must first increase investment in human, material and financial resources. The main leaders of an enterprise must attach importance to technology research and development, and provide guarantees for research and development around the company's core technology in terms of organizational leadership, staffing, hardware, and software. Only when the core technology is always in the leading position in the industry, can the company continue to grow and develop, and be invincible in the market competition.

Scientific research, talent training, introduction and use

The key to enterprise technological innovation lies in the development of talents, science and technology and economy. Talents are the most critical and fundamental factor. To achieve modernization, we must rely on knowledge and talents. Talents are the most precious resource of an enterprise's intangible assets. They are carriers of intangible capital. The advantage of an enterprise comes from the advantage of talents. The main body of corporate capital comes from its carrier-talents.

The training of talents does not happen overnight. Enterprises must not only have financial investment, but also have systematic arrangements in organizational management, such as training of talents, studying in relevant majors of well-known universities, and even studying abroad. The price must be good at management.

Although the introduction of talents takes less time than cultivating talents, the short-term investment is relatively large, such as wages, housing, the provision of software and hardware equipment, etc., the cost is considerable. And how to use talent is even more learned. How to introduce competition and restrain the incentive mechanism in talent management is a problem that corporate leaders have to face. The mechanism of an enterprise always restricts people's creativity at different levels and to varying degrees.

The design of mechanism power is the innovation of mechanism. Good mechanism should minimize human factors and manifest itself as an automatic, benign and effective operation method. There must also be a good mechanism for the introduction and use of talents in order to give play to their ingenuity and make their scientific and technological achievements into productivity as soon as possible.

Build corporate brand and lead the market trend

The scientific and technological content of a product is only one of the elements that make up a branded product. It takes a series of efforts for an enterprise product to become a brand.

The formation of each brand is a community that combines economics and culture. This cultural heritage determines that it has unique affinity and penetration among customers. It is a core part of corporate competition. The brand effect lies in the passing between the brand and the consumer. Interaction can form a close, lasting and stable relationship. This can only be achieved through the implementation of brand services, so that the charm of brand products can be deeply rooted in consumers' minds, thereby creating a strong sense of belonging among customers and creating brand loyalty. Established a good image of the enterprise. Although consumers buy goods, they choose images.

As a prestige, impression, credibility, quality, service and feeling, brand name brings material benefits and psychological enjoyment to consumers. As a result, the brand-name intangible asset has a broad market space, which can bring a continuous source of huge wealth for the enterprise, thereby turning the hidden liabilities of the enterprise into explicit returns.

Strengthening internal control of enterprises and establishing an effective corporate governance mechanism

The main body of the corporate governance structure is plural, and the pluralism of the main body determines the decentralization of rights.

How corporate ownership is allocated among multiple subjects and how decentralized rights are coordinated is a problem that corporate governance structures need to address. The corporate governance structure is the specific operating mechanism of the enterprise ownership contract. Common corporate governance structures are mainly composed of shareholder meetings, boards of directors, supervisory boards, and managers. The coordinated operation of these power agencies depends on effective voting mechanisms, supervision mechanisms, manager incentive mechanisms, and employee participation mechanisms. The design of this mechanism emphasizes mutual checks and balances in management, to prevent the company's control from falling into the hands of a few large shareholders with more shares, to avoid investment risks, to operate stably, and to strictly abide by the rules and procedures that should be followed for major decisions.