Purchase Price Allocations/Financial Reporting Services
These valuation services are performed under the Fair Value accounting standard, as Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (formerly SFAS No. 157, Fair Value Measurements).
- Purchase Price Allocation – Acquisitions
- Goodwill Impairment Testing
- Intellectual Property and Intangible Assets
Companies making acquisitions are required to allocate the purchase price over the assets acquired. Under ASC 805 (formerly SFAS No. 141 and 141R), companies are required to use purchase accounting for business combinations. Typically, portions of the cost are assigned to plant, property and equipment; intangible assets; inventory; and goodwill – all on the basis of fair value.
After making acquisitions, companies are required to perform an impairment test on existing goodwill as well as identifiable intangibles under ASC 350 (formerly SFAS No. 142 – Goodwill and other Intangible Assets). If the fair value of a business unit is less than the carrying amount of the assets in that business unit, impairment has occurred and must be appropriately accounted for.
Assigning fair values to the tangible and intangible assets and liabilities of a business enterprise requires the skills of qualified valuation professionals. T&M has performed this work for many of our clients and our purchase price allocations have withstood scrutiny by auditors from the Big Four accounting firms. Our valuations are performed by senior accredited valuation experts holding one or more of the following professional credentials: Accredited Senior Appraiser (“ASA”), Accredited in Business Valuation (“ABV”), Certified Valuation Analyst (“CVA”), and Certified Public Accountant (“CPA”).