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Allocate Purchase Consideration with Independent and Compliant Valuation Reports

Following a business acquisition, it is essential to identify and measure the fair value of acquired assets, liabilities, and identifiable intangible assets to accurately allocate the purchase consideration. Our experts provide independent and reliable Purchase Price Allocation (PPA) valuation services for business combinations in accordance with applicable accounting standards, including Ind AS 103, IFRS 3, and ASC 805. Our comprehensive valuation reports support accurate financial reporting, statutory audits, regulatory compliance, and informed post-acquisition decision-making.

What is Purchase Price Allocation (PPA)?

Purchase Price Allocation (PPA) is the process of allocating the purchase consideration of an acquired business to its identifiable tangible assets, intangible assets, liabilities, and goodwill at their respective fair values in accordance with applicable accounting standards. An independent PPA valuation ensures accurate financial reporting, supports statutory audits, facilitates post-acquisition accounting, and ensures compliance with Ind AS, IFRS, and US GAAP requirements for business combinations.
  • Business Combinations
  • Mergers & Acquisitions
  • Ind AS 103 Compliance
  • IFRS 3 Compliance
  • ASC 805 Compliance

What Decision are you making?

01

Business Combinations

Allocates the purchase consideration among acquired assets and liabilities to accurately reflect the fair value of the acquired business.

02

Mergers & Acquisitions

Supports acquisition transactions by determining the fair value of identifiable assets, liabilities, and goodwill arising from the transaction.

03

Ind AS 103 Compliance

Provides PPA in accordance with Ind AS 103 to ensure compliance with Indian accounting standards for business combinations.

04

IFRS 3 Compliance

Supports global businesses in complying with IFRS 3 requirements for accounting and reporting business combinations.

05

ASC 805 Compliance

Assists companies in preparing purchase price allocation reports in accordance with ASC 805 for US GAAP financial reporting.

06

Financial Reporting

Supports the recognition and measurement of acquired assets, liabilities, and goodwill in the financial statements.

Our Valuation Methods, Simplified

Discounted Cash Flow (DCF) Method

Determines the fair value of assets or businesses by estimating the present value of their expected future cash flows using an appropriate discount rate.

Relief from Royalty Method

Values brands, trademarks, and certain intellectual property by estimating the royalties that would have been paid if the asset were licensed from a third party.

Multi-Period Excess Earnings Method (MPEEM)

Measures the value of customer relationships and other income-generating intangible assets by isolating the excess earnings attributable to those assets.

Replacement Cost Method

Determines the value of an asset based on the current cost required to replace or recreate it with an asset of equivalent utility, adjusted for depreciation and obsolescence.

Market Approach

Estimates the fair value of assets by comparing them with similar assets or comparable market transactions where reliable market data is available.

Cost Approach

Determines the value of an asset based on the cost to recreate or replace it, considering physical deterioration, functional obsolescence, and economic obsolescence where applicable.

Frequently asked questions

Answers for business owners who want to understand the process before speaking with an expert.

Purchase Price Allocation (PPA) is the process of allocating the purchase consideration paid in a business acquisition to the identifiable assets acquired, liabilities assumed, and goodwill in accordance with applicable accounting standards such as Ind AS 103, IFRS 3, and ASC 805.

A PPA is required whenever a business combination or acquisition is accounted for under the acquisition method. It enables businesses to recognize acquired assets and liabilities at their fair values for financial reporting purposes.

A PPA typically involves the valuation of tangible assets, customer relationships, brands, trademarks, software, patents, technology, contracts, other identifiable intangible assets, and goodwill, along with the fair value assessment of liabilities assumed.

A PPA generally requires the acquisition agreement, purchase consideration details, financial statements, fixed asset register, management projections, business plans, legal documents, and information relating to identifiable intangible assets and liabilities.

Depending on the nature of the assets being valued, a PPA commonly applies the Discounted Cash Flow (DCF) Method, Relief from Royalty Method, Multi-Period Excess Earnings Method (MPEEM), Replacement Cost Method, Market Approach, and Cost Approach to determine fair values in accordance with applicable accounting standards.

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