What Are Hidden Values?
Also known as hidden reserves, hidden values are assets that are included on the balance sheet of a company, but are reported as a less than their true value. Carrying the reserves at an undervalued rate allows the assets to be excluded from consideration when it comes to setting the price of stock shares issued by the business. Many investors make it a point to identify these undervalued reserves when evaluating stock options for purchase and inclusion in an investment portfolio. Hidden values can include just about any type of asset. Real estate that is undervalued is one prime example. It is not unusual for businesses to also hold patents that at least for a time are valued at a lower rate. The same general approach can be used with trademarks that are created and held in abeyance, sometimes for use in a later project or expansion effort.
