Purchase Price Allocations

Asset purchases and business combinations trigger a number of financial reporting requirements that must be on an accurate and timely basis. Accounting Standard Codification 805 (formerly known as SFAS 141R) establishes accounting guidance for allocating the premium paid above book value for both tangible and identifiable intangible assets acquired in a given transaction. In delivering these purchase price allocations or PPAs, Madison Street Capital’s talented professionals call upon decades on hands-on experience in valuing tangible assets, as well as separately recognizable intangible assets and intellectual property.

We provided significant input as SFAS was drawn up, along with the subsequent implementation guidance provided by the FASB. Our unique insights and thorough understanding of valuation requirements in these situations help our clients overcome new challenges in the initial and post-closing recording of transactions linked to acquisitions, and the proper determination of fair value of assets and liabilities.

Because we have worked in hundreds of industries and industry verticals, we can seamlessly combine industry knowledge with valuation expertise to effectively address allocation issues throughout the transaction process. Our services in the PPA area include amortization estimates, fair value estimates and support, and pro forma allocations, among others. In tapping our expertise and capabilities, our clients can confidently establish an overall purchase price based on our rigorous determination of the fair market value and useful lives of fixed assets, intangible assets related to customers, contracts, technology, marketing, and other factors, as well as intellectual property.

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