Purchase price allocation (PPA) is an application of goodwill accounting whereby one company (the acquirer), when purchasing a second company (the target), allocates the purchase price into various assets and liabilities acquired from the transaction.
With respect to the assignment of goodwill and other asset values, valuations for financial reporting purposes involve the allocation of asset values at the reporting unit level, and the acquired assets can be added to an acquirer’s existing reporting units.
A Typical Purchase Price Allocation
Book Value Being Adjusted to Fair Value
Book values of assets and liabilities are often different from their fair values. In allocating the purchase price to these assets and liabilities, we step, or write, them up/down to reflect their fair values.
Valuation of Intangibles Assets
Examples of identifiable intangible assets may include customer contracts, Internet domain names, patents and trademarks, brand names, copyrigts, concession rights, non-compete agreements, licences or permits in specific regulated industries, profit guarantees etc. As much we value our employees, assembled workforces are not considered identifiable intangibles under IAS 38.
Case Specific Considerations
Why Valtech?
Valtech’s team has provided valuation advice to over 200 listed companies in Hong Kong, China, Singapore, Taiwan, Australia, the United Kingdom, the United States and Germany.
Our valuation team is formed by a team of professional from multiple disciplines including audit, financial modelling, tax, internal control and surveying. Our management adheres professional excellence. Abundant resources are reserved to develop standardized policies and procedures for quality control. In every valuation engagement, Valtech would arrange a team of consultant with both accounting (CPA) AND finance (CFA) qualifications whenever possible.
About Valtech Valuation
Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The firm is renowned for its expertise in advanced valuation techniques, customized valuation models, data-driven insights, and adherence to compliance and reporting standards. The firm has a solid track record in valuation advisory for listed companies, private equity, fund managers, and financial institutions. Valtech’s qualified team comprises members with PhDs, CPA (HKICPA), CFA, Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors, and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore. Valtech continues to expand into more markets by leveraging its valuation platform and recruiting local experts.
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