Glossary

With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.

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Asset Approach

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Category: Business Valuation

Definition:

The asset approach is one of the three fundamental approaches to business valuation. The other two are the market approach and the income approach. The Asset Approach focuses on determining the value of a business by assessing the value of its underlying assets and liabilities. The valuation process involves identifying and valuing both tangible assets (such as real estate, machinery etc) as well as and intangible assets (such as patents, trademark etc) using appropriate valuation techniques. By subtracting the company’s liabilities from the total asset value, the resulting value, also known as Net Asset Vale (NAV) represents the estimated value of the company based on its underlying assets. This Asset Approach assumes that the primary value of the business is based on the assets it owns.