For example, if you buy a SaaS company, you're generally buying existing user relationships. If those accounts are on month-to-month plans /
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they're effectively invisible on the balance sheet. GAAP assumes that all your sales next month are by grace of God, not recurring billing.
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@RolenTLe Isn't that pretty much what "goodwill" is in accounting? -
This is a common misconception. Goodwill is simply "purchase price of businesses you acquire minus their hard assets." You can't create it.
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Ok, but isn't that what is happening in your SaaS example?
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Another non-balance sheet asset - the skill and accumulated knowledge of your engineering staff,
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