# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Tangible Common Equity

Tangible common equity is defined as common equity minus certain intangible assets that would have little or no value in the event of liquidation.

Tangible assets such as equipment and real estate can be sold in the event of liquidation and hence generate revenue, but intangible assets such as goodwill and trademarks would have no value in case the company declares bankruptcy.

Hence, intangible assets usually cannot be sold to set off some of the liquidation costs and pay back any outstanding debt. Exceptions to this rule include patents, which still may have a productive life after its owner has gone out of business. Mortgage servicing rights, another intangible asset, are usually also included in tangible common equity because they arguably have a real market value and can be sold. Some estimates of tangible common equity may also include tax benefits on goodwill write-downs as these benefits are expected to hold a real monetary value.

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