Companies are required to allocate the total purchase price to all of the assets and liabilities acquired, including intangible assets.

We provide counseling in the area of acquired intangible assets, as required by the U.S. and International regulations. in addition, we evaluate these assets on a 'fair value' basis.

The value derived from intangible assets has increased significantly in today’s knowledge-based economy. The book value of many publicly quoted companies is significantly less than the market value. Stock market value is largely derived from assets that do not appear on the balance sheet. This highlights the increasing significance of intangible assets and their importance in acquisitions.
Developments in International Financial Reporting Standards (IFRS) have considerably expended the definition of intangible assets. With the mandatory application of IFRS to listed entities, the option for other entities to move to IFRS, identification and valuation of intangibles will become a challenge for all companies engaging in acquisition activity, under IFRS 3.

The main reason for purchasing price allocation (PPA) is to bring greater transparency. That will allow the acquisition process to identify and value the assets being acquired and to achieve the net residual amount which will be attributed to goodwill. Intangible assets will generally be amortized over a period of up to twenty years. In some cases, they may be considered to have indefinite economic lives and therefore, not subject to amortization. On the other hand, IFRS does not permit the amortization of goodwill but instead requires an annual defective review which, by itself, may lead to instability in reported profits. Accordingly, companies will devote themselves in order to ensure that intangible assets are fully identified and accounted for separately from goodwill.