Identifiable Asset

What is an 'Identifiable Asset'

An identifiable asset is 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. Acquisition Adjustment

  2. Acquisition Accounting

    A set of formal guidelines describing how assets, liabilities, ...
  3. Goodwill

  4. Intangible Asset

  5. Active Asset

  6. Book Value

Related Articles
  1. Term

    Comparing Tangible and Intangible Assets

  2. Investing Basics

    How To Evaluate A Company's Balance Sheet

  3. Options & Futures

    Financial Statements: Long-Lived Assets

    By David Harper (Contact David)In the preceding section, we examined working capital, which refers to the current assets and liabilities of a company. In this section, we take a closer look at ...
  4. Economics

    Explaining Tangible Net Worth

  5. Markets

    Intangible Assets Provide Real Value To Stocks

  6. Investing

    The Difference Between Book and Market Value

    Book value is the price paid for an asset. It never changes as long as the asset is owned. Market value is the current price at which the asset can sell.
  7. Personal Finance

    Can You Count On Goodwill?

  8. Investing Basics

    How To Calculate Goodwill

  9. Investing

    What is Asset Management?

  10. Investing

    Ben Graham's Advice on Reading Financial Statements

    Seven pieces of advice from Benjamin Graham on understanding financial statements.
  1. What is the difference between goodwill and tangible assets?

    Find out about tangible and intangible assets, and understand how intangible assets, such as goodwill, do not take physical ... Read Answer >>
  2. How do intangible assets appear on a balance sheet?

  3. How does one amortize intangible assets?

  4. How are net tangible assets calculated?

  5. What are typical forms of capital assets within a manufacturing company?

    Learn the typical forms of capital assets for a manufacturing company, such as land, buildings, equipment, goodwill and trademarks. Read Answer >>
  6. What is the difference between a fixed asset and a current asset?

    Discover the difference between fixed assets and current assets and the value of each to a company. Learn the category and ... Read Answer >>
Hot Definitions
  1. Demand Curve

  2. Goldilocks Economy

  3. White Squire

  4. MACD Technical Indicator

  5. Over-The-Counter - OTC

  6. Quarter - Q1, Q2, Q3, Q4

Trading Center