Assets or liabilities?

Assets or liabilities?

Not all land and buildings are assets. Land and buildings for transfer only constitute being assets if they are capable of generating net revenues or, failing that, if there is a stable source of subsidy, in the form of grants or endowments, from elsewhere.

In the case of libraries, a number of factors need to be considered in determining whether the proposition is viable and sustainable; to determine if it is an asset or liability.

Key considerations here are:

  • The condition of the building.
  • Restrictions on the future use of the building.
  • The potential to make use of the space to generate income.

If projects are to be successful at delivering community benefit for the long term, a rational assessment of viability is paramount.

Resources and time are often in short supply in these situations, especially in the initial rush to save assets from being lost for future community benefit. Site selection and feasibility, options for alternative uses and deadlines for funding may all impact on the ‘window of opportunity’ afforded communities. However, community organisations should not allow external pressures to force them into agreeing to something if they are not convinced of a project’s potential to be viable and manageable.

All partners need to be aware of the timescales and resources required in determining whether a library represents an asset or liability to the recipient organisation.

The feasibility section of this guide (under Getting Started) provides further support to organisations to help establish whether a building is an asset or liability.

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