Purchase price allocation

In the past few years, Purchase Price Allocation (PPA) has gained in importance because of the steadily increasing importance of company acquisitions. PPA refers to the process in which the total purchase price is distributed over the individual assets and debts acquired, resulting in a residual value that is either goodwill or badwill (negative goodwill). The requirements regarding the documentation of a purchase price allocation in the context of the audit of the consolidated financial statements are very high, particularly according to international accounting standards.

Risks but also assessment scope are associated with the following areas in particular:

• Assembled workforce assessment
• Assessment of brands, industrial property rights, patents, technology
• Determination of fair values for real estate and tangible assets
• Order backlog assessment
• Assessment of customer relations
• Determination of Contributory Asset Charges (CAC)
• Determination of industry-specific capital cost rates

We have extensive experience in the preparation and documentation of purchase price allocations. In recent years, we have implemented projects for several SMEs as well as companies listed on the stock exchange. We assist you during the entire process of the purchase price allocation. Our consulting services extend from the analysis and identification of assets and debts up through to profitability assessments of assets and of goodwill (impairment test) for the years to come.