Accounting procedures require post-transaction valuations concerning goodwill (PPA), acquired intangible assets and impairment testing. Whether helping you carry out your own valuation assessments or executing on your behalf, AN Valuation Services is highly qualified to guide you through a smooth post-transaction valuation process.
IFRS, Dutch GAAP and US GAAP require an acquiror to allocate purchase consideration to the fair value of all acquired assets and liabilities when obtaining control of a company. This process, called a purchase price allocation (PPA), involves assets and liabilities that did not exist on the target’s balance sheet prior to the transaction. Certain pre-existing assets must be restated to fair value. This process can be time consuming and complex. AN Valuataion Services has a wealth of experience in this area and can work with you and your independent auditor to achieve a smooth process.
If you acquire a significant interest in a company but not control (often between 20% and 50% interest in a company), you may need to recognize acquired intangible assets and record them at fair value. As with a PPA, this often involves assets, and sometimes liabilities, that did not exist on the target’s balance sheet prior to the transaction.
Indefinite life assets such as goodwill are tested for impairment at least annually or earlier if there is a “triggering event” signalling that the assets value may be less than its balance sheet value. Definite life assets are tested when there is a triggering event. If the balance sheet amount is greater than the impairment testing value, the asset should be impaired.