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Purchase Price Allocations for Mergers & Acquisitions

Purchase price allocation (“PPA”) is an exercise where the acquirer allocates the purchase price paid to the acquired assets and liabilities of the target company. PPA is usually carried out for accounting and financial reporting under Ind AS, IFRS and US GAAP , which requires companies to report the Fair Value of assets and liabilities acquired in their financial statements. PPA is also required for allocation of consideration paid in a ‘Slump sale’/ ‘Slump exchange’ transaction. PPA process allocates the purchase consideration paid for acquisition of an entity / business to the Fair Value of tangible and intangible assets acquired and liabilities assumed. The difference between the purchase consideration and the fair value of the tangible and intangible assets is allocated to goodwill (subject to the impairment assessment).

PPA is a complex process and involve identification and valuation of intangible assets. It requires an in-depth knowledge of the acquired business and its key value drives as well as knowledge and experience in the application of various valuation approach and methodologies.

RBSA has a strong in-house capabilities for valuation of tangible assets (including land, building and plant and machinery) and intangible assets and has executed numerous complex Purchase Price Allocations involving leading corporates across a broad range of industries. We also have alliances with other leading consulting firms in US, Europe and other parts of the world in order to provide clients seamless cross-border services.

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