Purchase Price Allocation: Goodwill, Intangibles & Fair Value Step-ups
Measure the consideration with an earn-out, strip the target’s old goodwill, step up PP&E and inventory, value a brand with relief-from-royalty and customers with MPEEM, book the deferred tax, test for a bargain purchase, compare full and partial goodwill and chart the post-deal charges: 8 labs on one fictional deal (educational, IFRS 3 / ASC 805 principles).
The first lesson is free — no account needed.
About this course
A purchase price allocation course that builds the whole PPA of one fictional deal, Ardenfield Group buying 80% of the kitchen-appliance maker Solvik Home, in a spreadsheet, for M&A and transaction services staff, valuation analysts, accountants and finance students. You measure the consideration transferred with discounted deferred cash, shares and an earn-out at fair value, remove the target's old goodwill and find the excess over book value, step up land, buildings, machinery and inventory with the extra depreciation, value the brand with relief-from-royalty and the customer relationships with the multi-period excess earnings method, book deferred tax on every step-up, calculate goodwill and test for a bargain purchase, compare full and partial goodwill for the NCI and chart five years of post-deal charges. General IFRS 3 and ASC 805 concepts, with no affiliation with the IASB or the FASB. Educational only, not accounting or valuation advice. The first lab is free.
Lessons
- Consideration Transferred: Cash, Deferred Cash, Shares & Earn-Out at Fair ValueFree
- Book Value of the Net Assets Acquired & the Excess to Allocate Pro
- Fair Value Step-ups: PP&E, Extra Depreciation & Inventory Pro
- Identifying & Valuing Intangibles: the Brand with Relief-from-Royalty Pro
- Customer Relationships with the Multi-Period Excess Earnings Method Pro
- Deferred Tax on the Step-ups & Net Assets at Fair Value Pro
- Goodwill & the Bargain Purchase Check Pro
- NCI: Full vs Partial Goodwill & the Post-Deal Amortisation Schedule Pro