Our team at Park Place Consulting provides clients with purchase price allocation services by assessing the value of tangible and intangible assets and liabilities in accordance with the US Financial Accounting Standards Board, under ASC 805 (SFAS 141(R))* to assist with mergers, acquisitions and to help clients get acquainted with the following areas:
Accounting for certain assets acquired and liabilites assumed in an acquisition are accounted for by the purchase price method of accounting; for example, assets acquired in process research and developing are capitalized; and certain contingent assets and earn-out arrangements are recongnized at fair value
In-process R&D is measured at fair value on the acquisition date, and post deal earnings are affected by amortization or impairment of the IPR&D asset
Transaction costs and restructuring changes the company acquires are expensed
Goodwill on partial acquisitions, even when less than 100% is recorded at fair value, resulting in higher asset values
* ASC 805 requires a buyer to recognize the acquisition date fair value of contingent consideration, as part of the transfer to the seller in exchange for the acquiree. It requires a buyer to measure contingent consideration classified as an asset or liability to its fair value through current period earnings each reporting period. It only applies to the buyer’s accounting in a business combination, including the accounting for contingent consideration. (www.fasb.org)