Personal
Home Bank accounts
Credit cards
Borrowing
Mortgages
Savings and investments
Insurance
Advice
Business
Home My business
Banking Solutions
International
Financing
Investing
Tips and Tools
Wealth Management
Home
CLOSE

Calculating your tangible net worth

29 March 2013 by National Bank
Calculating your tangible net worth

Your tangible net worth is equal to the value of all of your assets, minus any liabilities and intangible assets you may own.

Contenu

As outlined in an  Investopedia  report, while a basic net worth calculation may suffice for most people, those holding copyrights, patents or other intellectual property rights may need to calculate their  tangible net worth .

Tangible net worth, like basic net worth, takes your assets and liabilities into account, but goes one step further by subtracting the value of intangible assets including goodwill, copyrights, patents and other intellectual property.

When applying for a loan, a lender may require a tangible net worth in order to provide a clearer picture of the assets that can be liquidated in the event of a loan default.

Tangible assets can include:

Intangible assets can include:

The dot-com era drew attention to the need to properly account for intangible assets, revealing large discrepancies between balance sheet figures and true market values.

Intangible asset valuation begins with the following considerations:

As with any net worth calculation, accurate values are critical, so most individuals and businesses will turn to qualified professionals in order to determine the value of their intangible assets.

  • Cash;
  • Real property (land and homes);
  • Personal property (cars, boats, furniture, jewelry, etc.).
  • Goodwill;
  • Copyrights;
  • Patents;
  • Trademarks;
  • Intellectual property.
  • Why is the asset being valued? (Financial reporting, bankruptcy, litigation, etc.);
  • What is the asset?
  • How will the asset be used in the future?
  • Who could buy the asset?

 

Legal disclaimer

Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.

The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.

The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.

This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.

The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.

Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).

Tags:

Categories

Categories