Valuation Advisory

The value of an entity varies depending on the valuation criterion and premise used. When we carry out a valuation of a company in a stable state of business, the valuation preposition is different from when we carry out a valuation in a distressed state of business. When valuing a business as a going concern or valuing a business in liquidation, there would be a significant difference in value. So, when determining the value of a company, the intent and time of valuation, as well as the state or health of the business, are critical.

PureValue Advisors is dedicated to providing concise and to-the-point valuation reports, and we go to great lengths to ensure the highest degree of accuracy. PureValue Advisors' experience and perfection have established them as a leading provider of valuation services for businesses, especially when it comes to PPA valuation. Our team of experts has a thorough understanding of the firms' valuation criteria as well as qualified insight into key regulatory concerns. They help in recognising intangible assets and amortisation, as well as assigning intangible assets and residual purchase price to reporting units.

Purchase price allocation is a practise in acquisition accounting in which an acquirer allocates the purchase price among the assets and liabilities of the target company acquired in the transaction. It aims to assign a fair value to all the assets and liabilities of the acquired company. Following the completion of a merger or acquisition, purchase price allocation is an important step in accounting reporting. The purchase price allocation method is required by current accounting standards, such as the International Financial Reporting Standards (IFRS), for any type of business combination deal, including mergers and acquisitions.

Components of a Purchase price allocation are

Net Identifiable Assets: Net identifiable assets are the total asset value of everything belonging to the acquired company after liabilities are deducted. Identification assets can be both tangible and intangible.

Write Up: It means increasing the book value of an asset if its carrying value is less than its current market value. An independent business valuation specialist determines the amount of the write-off. They conduct a fair market value assessment on all of the target assets, which determines when write-ups are required and how much the write-up should be.

Goodwill: The amount which is excess of the target company's net value. It is the difference between the purchase price of an acquired company and the fair market value of its assets and liabilities. Goodwill is critical in accurate accounting reporting and it should be taken care if it can be recovered and record any necessary adjustments. If goodwill is not recoverable, in whole or in part, it must be recorded as an impairment. Goodwill is not depreciable, but it may be amortised at times.

Aside from mergers and acquisitions, Purchase Price Allocation must be carried out whenever the company's management changes. One case could be when a shareholder purchases more equity and eventually has enough to take control of a company.

Some broad categories for addressing asset acquisition are, working capital items including cash, accounts receivable, and an inventory of current liabilities, such as accounts payable, deferred revenue, and accruals. Personal property and real property including machinery and equipment, buildings, leaseholds, etc. Identifiable intangible assets including developed technology, any technology currently under development, non-compete agreements, trade names and trade secrets, intellectual property, customer relationships, etc.

To determine the value of intangible assets, various iterations of a discounted cash flow analysis are typically used. The analysis usually begins with calculating an internal rate of return (IRR) based on the purchase price and a financial forecast. Income is assigned to identifiable intangible assets based on the percentage of total target business forecast income assigned to each asset.

In general, the higher the rating and the more experience the appraiser has, the lower the cost to the buyer. Therefore, companies looking to acquire other companies should look for an experienced expert witness who is familiar with the accounting standards. Otherwise, the company will spend more time and money in the long run. Purchase price allocation is a very complex process and requires financial and business professionals with a deep understanding of business plans and various accounting principles.

Pure Value Advisory Services team is dedicated to providing great efforts to produce reports and ensure the highest level of accuracy. The experience and excellence of Pure Value Advisory Services has established Pure Value Advisors as a leader, provider of evaluation services for companies, especially in the field of purchase price acquisition.

Purchase Price Allocation is the process of conducting valuation for assigning Fair Market Value of the assets and Liabilities and also to determine value of the goodwill. Once the value of business is decided, it is important to determine the contribution of each of tangible and intangible assets. The bifurcation of intangible assets into its different classes is a complex and technical exercise and it requires the skill set and experience of the valuator to determine the valuation of independent identifiable intangible as well as assets under consideration.

We, PureValue Advisors are committed to provide crisp and to-the-point valuation reports and we delve our self into each minute detail to provide highest level of accuracy. PureValue Advisors’ expertise and perfection have made them a leading provider of valuation services for business organizations especially in case of PPA Valuation. Our team of professionals offers in-depth understanding of the firms’ valuation requirements as well as qualified insights into key issues of concern for regulatory bodies. They assist with identifying recognizable intangible assets and amortization, and assign intangible assets and residual purchase price to reporting units.