Why is identifiable intangibles calculated with book value of equity and not tangible book value?

Making Gravy's picture
Making Gravy - Certified Professional
Rank: King Kong | banana points 1,636

Question says it all. Why is identifiable intangibles calculated as:

Equity purchase price - book value of equity * % identifiable intangibles

And not

Equity purchase price - tangible book value * % identifiable intangibles

Thank you!

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Comments (2)

Aug 21, 2018

Bump. Maybe even a high level explanation of Book Value of Equity vs. Tangible Book Value would be helpful.

Aug 23, 2018