A common method of valuing a business is to compute its net worth as the difference between total assets and total liabilities. However, it is important to adjust for certain assets in order to assess true economic worth, because inflation and depreciation affect the value of some assets. In the computation of the adjusted tangible book value, goodwill, patents, deferred financing costs, and other intangible assets are considered with the other assets and deducted from or added to net worth. This upward or downward adjustment reflects the excess of the fair market value of each asset above or below the value reported on the bal-ance sheet. Following is an example: