A business valuation procedure used in acquisition accounting that changes the stated values of a company's assets and liabilities to reflect its current fair market values. This accounting technique adjusts asset and liability values either up or down, so they reflect the true values on either an ongoing concern, forced liquidation or orderly liquidation basis.
Also referred to as "asset accumulation method".
Both tangible and intangible assets should be included in the adjustment process, as should off-balance-sheet assets and unrecorded liabilities. The difference between the total fair market value of the adjusted assets and the total fair market value of the adjusted liabilities is the "adjusted book value" (what the business is considered to be worth).
There are many ways a business can be valued; alternatives to the adjusted net asset method include the discounting method, the capitalization method and the excess earnings method, among others.