Hi Madamswer
Under accounting standards, when a business combination occurs, the acquirer is required to identify, value and recognise intangible assets being acquired which are not permitted to be recorded on the balance sheet outside of a business combination (i.e. by the target when it is operating on a stand alone basis) For example and with reference to Carsales, customer lists were valued at $617m and trade names were $152m. These assets are required to be amortised over their useful life in the Carsales p&l but not if Trader were a stand alone business.
These assets don’t require any additional cost to maintain or service other than the standard marketing or employee costs that are already factored into the p&l. To include the amortisation is effectively double counting these costs.
To put it another way, you wouldn’t normalise Traders p&l down to add in customer list amortisation if it were a stand alone business.
On the other hand if we were talking about software which requires continued investment then it would be prudent to factor in the amortisation.
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$34.59 |
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Mkt cap ! $13.02B |
Open | High | Low | Value | Volume |
$33.99 | $34.82 | $33.91 | $6.194M | 179.7K |
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No. | Vol. | Price($) |
---|---|---|
18 | 411 | $34.58 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$34.60 | 329 | 12 |
View Market Depth
No. | Vol. | Price($) |
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22 | 608 | 34.560 |
4 | 213 | 34.550 |
3 | 129 | 34.540 |
5 | 247 | 34.530 |
7 | 233 | 34.520 |
Price($) | Vol. | No. |
---|---|---|
34.580 | 97 | 9 |
34.590 | 177 | 6 |
34.600 | 620 | 9 |
34.610 | 361 | 7 |
34.620 | 273 | 5 |
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