Business combinations
USINFO | 2013-12-30 10:17
Recently issued guidance on business combinations require that the purchase price allocation in a purchase business combination begin with an analysis to identify all of the tangible and intangible assets acquired. Intangible assets, such as patents, copyrights, brand names, customer lists, and above/below market contracts may be identified, and the fair value of each asset must be estimated. The total purchase cost is allocated based on the relative fair values of the individual assets.
Underlying assumptions and data used to develop the valuations should be adequately tested and challenged by companies and their auditors.
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