Purchase Price Allocation

Companies engaging in business combinations or slump sale must steer along with complex accounting guidelines and tax treatments, which can have a profound impact on the success of a transaction. A business combination may be designed in a multitude of ways for taxation, legal or other reasons. Hence, it is important to understand the transaction objective including the tax and accounting implications that apply to the specific transaction at hand. 

After the value of the consideration is determined in a business combination it must be allocated among all tangible and identifiable intangible assets and liabilities with the residual value being allocated to goodwill. This exercise may sound easy, but it can become complex quickly when the deals include contingent consideration or when the consideration is not in monetary terms. The central challenge of the allocation lies in the identification and valuation of the intangible assets that have not been reported/ recorded by the acquiree in the past i.e. where the balance sheet recognition criteria set out in IAS 38/ IndAS 38 is not met previously. 

Our proven purchase price allocation method delivers fair insights into the valuation of key tangible and intangible assets. We have deep industry and technical experience in the valuation of intangible assets such as trade name, customer relationships, employees workforce, technology, etc. Our team’s expertise helps adhere to Ind AS 103, Ind AS 110, IFRS 3, Income Tax Act and other guidelines. 

Purchase Price Allocation valuation services include:  

    • Assumed liabilities
    • Contingent liabilities
    • Pension liabilities 

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