Purchase Price Allocation Service
After the acquisition or merger of a business, it is important to perform a purchase price allocation (PPA). Purchase price allocation is the process of dividing and allocating the purchase price into assets and liabilities. An important part of PPA is to determine the fair market value of tangible and intangible assets & liabilities. Any difference between the purchase price and the sum of assets & liabilities is considered as goodwill.
Typical business assets and liabilities include:
- Capital such as cash, accounts receivable, inventory (minus associated liabilities).
- Real property such as tools, equipment, and machinery.
- Intangible assets such as developed technology, customer relationships, and brand recognition.
- Other intangible assets such as goodwill.
Purchase price allocation is a fairly complex process; however, the appraisers at Objective Investment Banking & Valuation have years of experience and are in the position to make accurate valuations. After a PPA is complete, an auditor will review the results to ensure that the PPA is acceptable. If there are many details that the auditor disagrees with, it may be necessary to bring in a second PPA service to generate a more accurate PPA. With Objective Investment Banking & Valuation, you can be confident that the PPA will be done correctly the first time.