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. |
 |
Investopedia explains '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. |
Related Definitions
Articles Of Interest
-
Cashing In On Corporate Restructuring
Companies use M&As and spinoffs to boost profits - learn how you can do the same. -
The Merger - What To Do When Companies Converge
Learn how to invest in companies before, during and after they join together. -
Can You Count On Goodwill?
Carefully examine goodwill and its sources before considering the value of your investment. -
The Basics Of Mergers And Acquisitions
Learn what corporate restructuring is, why companies do it and why it sometimes doesn't work. -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Explaining Amortization In The Balance Sheet
Amortization is important to account for intangible assets. Read to find out more about amortization. -
Conglomerates: Cash Cows Or Corporate Chaos?
Huge companies may not be as infallible as previously assumed. Find out why bigger isn't always better. -
GE Delivers Some Much-Needed Normalcy
GE's core operations aren't exactly strong yet, but they're a little better than expected and that's good enough for now. -
Understanding Off-Balance Sheet Financing
For anyone who was invested in Enron, off-balance sheet (OBS) financing is a scary term. Off-balance sheet financing means a company does not include a liability on its balance sheet. It is ... -
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations.
Free Annual Reports