• Purchase Price Allocation

Purchase price allocation services, done by credentialed analysts.

Purchase Price Allocation Services for ASC 805 and financial reporting compliance – from the same CFA- and CVA-credentialed team that builds your 409a.
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    • The basics

    What Is a Purchase Price Allocation, and Why Does It Matter?

    A purchase price allocation is the exercise of splitting the price paid for an acquired business across the fair value of its tangible assets, identifiable intangible assets, assumed liabilities and residual goodwill. US GAAP requires it under ASC 805, and the resulting figures set the baseline for amortisation and future impairment testing.

    When one company acquires another, US GAAP (ASC 805) requires the acquirer to allocate the total purchase price across the fair value of the acquired tangible assets, identifiable intangible assets – such as developed technology, customer relationships and trade names – assumed liabilities and residual goodwill.

    Professional purchase price allocation services help companies establish and document these fair values using appropriate valuation methodologies and support the resulting accounting treatment.

    Getting this allocation wrong can create downstream problems for financial reporting, tax treatment and future impairment testing. It is also a common area of auditor and regulatory scrutiny following an acquisition.

    Supports ASC 805 compliance

    A defensible allocation your auditors can rely on.

    Protects future reporting

    Establishes the baseline for amortization and impairment testing going forward.

    Built by credentialed analysts

    The same rigor as our 409a valuations, applied to acquisition accounting.

    Cross-border ready

    Experience allocating purchase price for acquisitions involving non-US entities and cross-border deal structures.

    • Purpose

    When You Need a Purchase Price Allocation

    A purchase price allocation valuation is typically required following a business combination when the acquirer needs to establish the fair value of acquired assets and liabilities for financial reporting under ASC 805.

    You may need purchase price allocation services when:

    • 1

      You've closed an acquisition or business combination

    • 2

      Your auditor has requested a PPA to support post-close financial statements

    • 3

      You're preparing for an audit that covers a recent acquisition

    • 4

      Your deal included complex consideration such as earnouts, contingent consideration or non-cash consideration

    • 5

      You need to establish opening balance sheet values for a newly acquired entity

    Our team can assess the transaction structure, identify the valuation requirements and determine the appropriate scope of the PPA engagement.

    • How it works

    Our Purchase Price Allocation Consulting Process

    Our purchase price allocation consulting process combines transaction analysis, valuation expertise and financial reporting considerations to develop a documented and defensible allocation.

    01

    • Step-1

    Book a call

    Pick a 45-minute slot. This call is your management discussion, where we learn about the transaction structure, acquired business and reporting timeline.

    02

    • Step-2

    Share your transaction documents

    Securely provide the purchase agreement, closing balance sheet and related deal documents after your call. 

    03

    • Step-3

    Our team builds your allocation model

    CFA- and CVA-credentialed analysts identify and value the acquired assets, liabilities and identifiable intangible assets using appropriate valuation methodologies.

    04

    • Step-4

    Draft delivered

    Review the allocation, ask questions and request revisions. Timelines vary depending on transaction complexity, the number of assets and liabilities involved and the structure of the consideration.

    05

    • Step-5

    Signed report

    Your final report is partner-reviewed and ready to support your financial statements and audit.

    • Purchase Price Allocation Accounting

    Purchase Price Allocation Accounting for ASC 805

    Purchase price allocation accounting is an important part of acquisition accounting under ASC 805. The process determines how the consideration transferred in a business combination is allocated to the fair value of identifiable assets acquired and liabilities assumed, with the residual generally recognized as goodwill. A well-supported PPA can help your finance and accounting team establish the appropriate opening balance sheet values and provide the valuation documentation needed to support subsequent financial reporting. Our analysts work with your finance, accounting and audit teams to ensure the valuation analysis is appropriately documented and aligned with the transaction’s reporting requirements.
    • Pricing

    Purchase Price Allocation Advisory Services

    Every acquisition is structured differently, so purchase price allocation advisory services are quoted individually after your management discussion call. We provide a fixed quote based on the scope of your engagement rather than an hourly estimate that can change as the work progresses.

    All engagements include an AICPA-compliant report, tax audit support and partner review before final delivery.

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    • PPA Valuation Services

    PPA Valuation Services for Acquisition Accounting

    Our PPA valuation services help companies determine the fair value of assets and liabilities acquired in a business combination and provide the supporting analysis required for financial reporting.

    As a PPA valuation services company, we combine valuation expertise with an understanding of ASC 805, allowing our team to address both the valuation and documentation requirements associated with a transaction.

    Our approach is designed for companies that need more than a standardized valuation output. Each engagement is reviewed by credentialed analysts and tailored to the transaction, acquired business and relevant reporting requirements.

    • FAQ

    Purchase Price Allocation, Answered

    What is a purchase price allocation?
    A purchase price allocation (PPA) is the process of allocating the purchase consideration in a business combination among the fair value of acquired tangible assets, identifiable intangible assets, liabilities assumed and residual goodwill. The analysis supports financial reporting under ASC 805.
    Purchase price allocation services involve analyzing an acquisition and determining the fair value of the acquired assets, liabilities and identifiable intangible assets. The resulting analysis helps companies establish appropriate financial reporting values and support ASC 805 compliance.

    A PPA is generally required following a business combination for financial reporting purposes under ASC 805. The acquirer must determine the fair value of identifiable assets acquired and liabilities assumed and recognize the resulting goodwill or bargain purchase gain, as applicable.

    A 409a valuation establishes the fair market value of a company’s common stock for equity compensation purposes. A PPA values the assets and liabilities of a company that has been acquired for financial reporting purposes under ASC 805. They are related valuation disciplines but serve different purposes.

    Most companies complete their PPA within the same reporting period as the acquisition so it can be reflected in the relevant financial statements. Engaging a valuation provider soon after closing helps ensure sufficient time for the analysis, review and audit process.

    Commonly identified intangible assets include developed technology, customer relationships, trade names, trademarks and non-compete agreements. Which assets apply, and the useful life assigned to each, depends on the acquired business and the specific transaction.
    PPA work is quoted individually because the effort depends on factors such as deal size, the number of identifiable intangible assets, transaction structure and the complexity of the consideration. We provide a fixed quote after the management discussion rather than an hourly estimate that can change.
    Companies often engage a purchase price allocation consultant or independent valuation specialist when they need support identifying and valuing acquired assets and liabilities, particularly when a transaction involves significant intangible assets, complex consideration or detailed auditor review.
    Yes. Contingent consideration is generally fair-valued at the acquisition date and may require subsequent remeasurement. Our analysts evaluate earnouts and other forms of contingent consideration and document the relevant valuation assumptions and methodology.
    Yes. We support cross-border acquisitions and transactions involving non-US entities. Our analysts have experience with international transaction structures and can provide PPA valuation services designed to support financial reporting and audit requirements.

    Get your purchase price allocation started

    Book a call to walk us through your transaction and discuss the purchase price allocation services you need.

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