is intangible asset included when calculating book value?

Question

when calculating the book value, are you supposed to include assets like goodwill? liquidating value and book value are the same?

thanks!

Answer 1

yes. they are included. Only in Tangible Book Value would you not include Intangibles.

Liquidating value is not equal to book value. Many assets are valued concervatively...such as land which would be liquidated at a higher value than the original purchase price...likely. As well, other assets have no cash value such as Deferred Tax credits...which are of no value if a company is not making profits.


Bob's answer is disturbingly wrong.

Goodwill is NOT depreciated. (at least in the USA) It can be impaired, but never depreciated. It is the result of paying more than the market rate for an asset...NOT the book value. Many assets may be fully depreciated and have no book value at all. If such an asset is purchased, it is valued at the lower of the purchase price or market rate. The purchasing company does not care about the seller's book value for that asset. If the purchase price was above the market rate, then the excess is goodwill.

There is no such thing as being "in business and generating goodwill, there was no expenditure"...that is ridiculous. Goodwill is only the result of purchasing assets above the market rate.

Answer 2

Maybe. Goodwill is carried at cost and depreciated. If you are in business and generate goodwill, there was no expenditure, so it's not on your books. If another company buys your company and pays above your book value, the accountants assume he was paying for your goodwill and it will have a value on the acquirer's balance sheet.

The same logic applies to patents that you developed versus patents that you bought. You can't invent something and then pull a number out of the blue sky and say ,"this patent of mine is worth 100 billion", and put it on your balance sheet.

Answer 3

ROE is derived by ability of taking the internet earnings and dividing it by ability of the Stockholders fairness. The Stockholders fairness is got here across on the soundness sheet and the internet earnings will seem on the money bypass sheet.