We Handle Purchase Price Allocation to Streamline Reporting Requirements
At WilliamsMarston, our team of experts is available to assist leaders in estimating what identifiable intangible assets could be recognized in a transaction and the fair value of those assets (and any liabilities — e.g. contingent consideration, etc.). These services also assist in the development of the estimates of the life of an intangible asset for amortization purposes under financial reporting. If you need assistance with these complex financial requirements, get in touch with us today.
What Our Purchase Price Allocation Services Consider
- Accounting Standards Codification (ASC) Topic 805 and International Financial Reporting Standards (IFRS) 3 establish the accounting standards for determining and reporting the assets and liabilities acquired in a business combination for financial reporting purposes. Internal Revenue Code 197, 167, 338, 1060 and others describe the recording and accounting for intangible and tangible assets acquired in a transaction. The financial and tax reporting guidance requires an acquirer to conduct purchase price allocation — recognizing assets, liabilities, and other items to be measured at the appropriate standard of value (fair value for financial reporting and fair market value for tax reporting).
- ASC 805 outlines guidance as to what constitutes an identifiable intangible asset and presents the typical areas of marketing-related, customer-related, artistic-related, contract-based, and technology-based intangibles. The Topic also outlines what items are not identifiable. In addition, financial reporting standards (ASC 805 and IFRS 3) also require the purchase price be allocated to reporting units (or cash generating units under IFRS) if appropriate, and that the value of the reporting unit be allocated to the acquired identifiable intangible and tangible assets and liabilities.
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