Skull Valley’s recorded equity immediately before the acquisition was a negative $950,000 ($3,050,000 assets – $4,000,000 liabilities). In this case, the value of Skull Valley stemmed from its $2 million trademark and $7.1 million in goodwill, both of which were not reported at all because Skull Valley had developed the assets itself. Book value of stockholders’ equity is a poor measure of the fair value of a company when the company has many unrecorded intangible assets.