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Purchase Price Allocation

Overview | IRC 409A | 123R | Estate and Gift Tax | Purchase Price Allocation | Fairness Opinions

Purchase Price Allocation and Goodwill Impairment

Following the completion of an acquisition, the buyer must account for assets acquired and liabilities assumed. The process involves identifying and valuing each of the tangible and intangible assets transferred to a buyer. We have significant experience in performing purchase price allocations under FASB ASC 805 (SFAS 141R) on behalf of middle market technology companies. While conducting a purchase price allocation engagement, we work closely with our clients’ audit firm in order to ensure that the results of our valuation are understood and accepted during the financial statement audit process.

Subsequent to an acquisition, the buyer is required to periodically reexamine the value of goodwill acquired through a two-step process to test for and subsequently measure the impairment of goodwill as specified in ASC 350 (formerly SFAS 142). Obtaining an independent valuation of intangible assets to satisfy financial reporting requirements can ensure compliance and also be an effective way to increase financial management efficiency following an acquisition.

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