From an accounting point of view, the purchase price allocation must be broken down into the identifiable assets and liabilities within the consolidated balance sheet scope. This results in a positive (goodwill) or negative delta on the acquisition date.
Purchase price allocation (PPA) must be carried out independently of the applicable accounting standard. In actuality, the value of the newly identified intangible assets and goodwill directly impacts the earnings a company shows due to the depreciation.
In the scope of analyzing a transaction, we offer
- Determination of the purchase price and date of acquisition relevant for the PPA.
- Analyze the transaction in detail, like buying and selling rights.
- Determination of the transaction price.
- Identification of the previously off-balance sheet intangible assets and liabilities will be shown in the future consolidated balance sheet.
- Determination of the fair value for all assets and liabilities, whether on or off the balance sheet.
- Calculation of difference in the purchase price and the fair value of the net assets.
- If it is a positive amount, it is treated as goodwill. If a negative difference is determined, it may be necessary to post this against earnings to increase profits.
We provide a detailed and easily comprehensible report on the valuations and the effect on intangible assets and goodwill resulting from them. We are familiar with the minimum requirements and best practices, providing the information you need to meet the extensive disclosure requirements related to a PPA.