Purchase Price Allocation (PPA)

Purchase Price Allocation (PPA)

Purchase Price Allocation (PPA)

Purchase price allocation, or PPA, is an application of goodwill accounting whereby one company (the acquirer), when purchasing a second company (the target), allocates the purchase price into various assets and liabilities acquired from the transaction. Allocation may be both towards tangible and intangible assets.

A company on completing an acquisition often requires PPA services for allocating valuations of assets/liabilities determined during the acquisition process. Such allocations are imperative, considering that investors often examine the financials of a company to determine the value added by an acquisition. Hence, values need to be allocated appropriately especially in terms of intangible assets of the company.

Typical assets and acquired liabilities that may require valuations include:

° Technologies ownership ° Trade secrets ° Non-compete agreements
° Patents ° Database ° Property, plant and equipment
° Copyright ° In-process R & D ° Real estate property
° Trademarks and trade names ° Customer lists

Added value to business entities from Purchase Price Allocation Services

  • Obtain in-depth analysis of issues associated with the acquisition decision and hence enabling accurate decision-making process;
  • Enhance investors’ confidence in the data and information released by the business entity; and
  • Ensure that critical deals and transactions are concluded as per best international practices.

 Services provided by Baker Tilly

  • Purchase price allocation and accounting services for acquisitions
  • Annual amortization estimates
  • Assist with identifying intangible assets
  • Determine fair value of the following intangible assets on regular basis:

Customer Related

Customer lists

Customer contracts

Customer relationships

Marketing Related

Trademarks

Trade names

Non-compete agreements

Technology Based

Trade secrets

Patents

In-process R & D

Contract Based

Franchise agreements

Licensing agreements

Employment agreements

Other related services