Shareholder funds

Shareholder funds (or equity) represent the accumulated, retained profits of a company. These retained profits belong to the shareholders and can be distributed at their discretion, thereby giving them the ability to completely wipe out all of their equity at any time. Therefore, it is preferable not to add shareholder funds to the value of the company.

Depreciations

For accounting / tax reasons, the costs of a long-term asset will be expensed over its useful life. In the year of its purchase, costs reduce liquidity but increase long-term assets, thus there is no change in the total asset situation. Extraordinary depreciations can be made if special situations lead to a loss in value or the write-off of an asset. Overall it is not recommended to add depreciations when you calculate the value of a company.