Hidden Assets

Categories: Accounting, Metrics

"Come ‘n listen to a story ‘bout a man named Jed…poor mountaineer barely kept his family fed…"

Remember them? Beverly Hillbillies? Never watched Nick at Nite? Ah well, ask your parents.

Yeah, so Jed owned 40 acres and a mule and had been farming, well, forever. Then, one day, he was shootin’ a racoon...when up from the ground came a bubblin’ crude. Oil, that is. Texas T. Black Gold.

Yeah, Jed stumbled on an oil, er...gold mine. And hundreds of millions of dollars later, that hidden asset got him a reallllly nice swimmin’ hole in 90210. Hidden assets happen in corporate America all the time.

A patent for flying robot cars that the company didn't realize it had, which suddenly became relevant when “tracking drones” became, like, a Thing. Broadcast rights attached to a TV station acquisition, where new technology lets cell phone spectrum clamp on and produce extremely clear phone calls. That asset was hidden. Now...not so much.

A change in tax law, such that the huge tax losses in the bankrupt company acquired for scrap are now suddenly a ginormous tax deduction. The acquirer won’t pay taxes now for 2 years because of this acquisition.

Assets don’t remain hidden very long.

Usually, companies have to disclose where they find value, if for no other reason than that it usually gooses their stock price. And everyone likes being rich, right?

Okay, so some people’s idea of rich is having 80 acres and two mules...

Related or Semi-related Video

Finance: What are Hidden Assets?2 Views

00:00

Finance allah shmoop what are hidden assets Come and listen

00:07

to a story about a man named did poor mountaineer

00:10

Barely kept family Remember them Beverly hillbillies never watched nick

00:14

at nite Well ask your parents Yes So jet owned

00:17

forty acres and a mule and had been farming well

00:20

forever Then one day he was shooting at a raccoon

00:23

You think that's what that is When up from the

00:25

ground came a bubbling crude oil that is texas tea

00:29

black gold You know the song So yeah jed stumbled

00:32

on an oil or a goldmine and hundreds of millions

00:37

of dollars later that hidden asset like the oil was

00:40

hidden from his farm He just didn't know it was

00:42

there that he was shooting at a coon and gave

00:44

him a really nice swimming hole in nine o two

00:46

one oh seriously great hidden assets happen all the time

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in corporate america as well A patent for flying robot

00:54

cars that the company didn't realize it had which suddenly

00:57

became relevant when you know tracking drones became like a

01:01

thing Broadcast rights attached to a tv station acquisition where

01:05

new technology lets cell phone spectrum clamp on and produce

01:09

Extremely clear phone calls while that asset was hidden No

01:13

not so much Well a change in tax law such

01:16

that the huge tax losses in the bankrupt company and

01:19

wired for scrap are now suddenly age enormous tax deduction

01:24

The acquirer won't pay taxes now for two years because

01:27

of it well asset don't remain hidden very long Usually

01:31

companies have to disclose where they find value if for

01:34

no other reason than that it usually goose is their

01:36

stock price and everyone likes being rich right Okay so

01:40

some people's idea of riches having eighty acres and two

01:43

mules But you know that's just jet good and listen

01:46

to a story about a man named shmoop over mountains 00:01:49.471 --> [endTime] and never never mind

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