Identifiable Assets Acquired

Brief Definition

Identifiable assets acquired refer to specific assets that a company obtains when it purchases another company or its business units. These assets can be individually recognized and valued. Identifiable assets include both tangible assets (like equipment, inventory, and buildings) and intangible assets (like patents, trademarks, and customer relationships).

Further Explanation

Identifiable assets acquired refer to specific assets that a company obtains when it purchases another company or its business units. These assets can be individually recognized and valued. Identifiable assets include both tangible assets (like equipment, inventory, and buildings) and intangible assets (like patents, trademarks, and customer relationships). These assets must be distinct and separable from goodwill, which represents the excess purchase price over the fair value of identifiable net assets.

Example:
When Company A acquires Company B for $1 million, and the fair value of Company B’s identifiable assets includes $300,000 in equipment, $200,000 in inventory, and $100,000 in patents, these are the identifiable assets acquired. If Company B’s total identifiable assets are valued at $600,000 and its liabilities are $200,000, the net identifiable assets are $400,000. The remaining $600,000 ($1,000,000 purchase price minus $400,000 net identifiable assets) would be recorded as goodwill.