Identifiable Asset


DEFINITION of 'Identifiable Asset'

An asset of an acquired company that can be assigned a fair value and can be reasonably expected to provide a benefit for the purchasing company in the future. Identifiable assets can be both tangible and intangible assets.

BREAKING DOWN 'Identifiable Asset'

If an asset is deemed to be identifiable, the purchasing company records it as part of its assets on its balance sheet. If an asset is not deemed to be an identifiable asset, then its value is considered part of the goodwill amount arising from the acquisition transaction.

For example, suppose ABC conglomerate company purchases both a smaller manufacturing firm and a smaller start-up internet marketing company. The manufacturing company would likely have most of its value tied up in property, equipment, inventory and other physical assets, so virtually all of its assets would be identifiable. The internet marketing company, on the other hand, would likely have very few identifiable assets, and its value as a company would be based on its future earnings potential. As such, the purchase of the marketing company would generate a lot more goodwill on ABC's books, because it would gain few identifiable assets from the marketing company.

  1. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  2. Goodwill

    An account that can be found in the assets portion of a company's ...
  3. Proprietary Technology

    A process, tool, system or similar item that is the property ...
  4. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  5. Patent

    A government license that gives the holder exclusive rights to ...
  6. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
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