DEFINITION of 'Write-Up'

An increase made to the book value of an asset, because its carrying value is less than fair market value. A write-up generally occurs if a company is being acquired and its assets and liabilities are restated to fair market value, under the purchase method of M&A accounting. It may also occur if the initial value of the asset was not recorded properly, or if an earlier write-down in its value was too large. An asset write-up is the opposite of a write-down and both are non-cash items.


For example, assume Company A is acquiring Company B for $100 million, at which point the book value of Company B's net assets was $60 million. Before the acquisition can be completed, Company B's assets and liabilities have to be marked-to-market to determine their fair market value (FMV).

If the FMV of Company B's assets is determined to be $85 million, the increase in their book value of $25 million represents a write-up. The difference of $15 million between the FMV of Company B's assets and the purchase price of $100 million, is booked as goodwill on Company A's balance sheet.

  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Inventory

    The raw materials, work-in-process goods and completely finished ...
  3. Fair Market Value

    The price that a given property or asset would fetch in the marketplace, ...
  4. Write-Down

    Reducing the book value of an asset because it is overvalued ...
  5. Write-Off

    A reduction in the value of an asset or earnings by the amount ...
  6. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
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