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How Can a Firm Have a Negative Valued Added,as Supposedly

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How can a firm have a negative valued added,as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?


Definitions:

Promissory Breach

Occurs when a party indicates by their actions, or explicitly states, that they will not fulfill their obligations under a contract.

Implied Warranty

A guarantee embedded in transactions by law, based on the assumption that a product will meet certain standards of quality and reliability.

Escrow Account

A financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction.

Common Area

Shared spaces in a property such as hallways, lobbies, and amenities available to all occupants or tenants.

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