As the impacts of climate change are increasingly felt, innovative businesses are beginning to re-invent their stranded assets to facilitate their corporate responsibility.
Stranded assets are forecasted to become a problem for many industries that have not invested in the circular economy of their products. What are stranded assets? Stranded assets are physical assets recorded on a balance sheet with an investment value that cannot be recouped and must be written off. These assets have suffered from premature or unexpected write-downs, devaluations or conversion to liabilities. As societal expectations on businesses shift towards a greener mindset, businesses may find some of their assets have now become stranded.
Once an asset is stranded, it generally becomes an expensive burden, partly due to the government shifting its focus to tax ‘dirty capital’ and subsidize Cleantech. This has begun to occur due to changing attitudes and dwindling natural resources. The escalating rate of this leads to uncertainty for businesses.
What will happen to the plant and equipment used to solely produce petrol-powered cars? The adoption of electric cars coupled with rising petrol prices has ignited the sales of electric vehicles. Therefore, businesses that service solely petrol-powered cars may find themselves with stranded assets or products that have reached their end-of-life cycle and cannot be thrown into landfills.
Our Business Advisors can assist you with the tax and commercial treatment of these assets and help you to apply for, and receive, government grants and subsidies.
William Buck’s extensive industry knowledge and teams of R&D, Tax and Business Advisors aim to assist innovative businesses in the treatment of these assets to reach tax-effective outcomes and support our industries as they adapt to a circular future that is sustainable for all.
Contact your William Buck advisor here for more details.