Purchase Price Allocation Agent
Supports post-acquisition purchase price allocation by identifying and valuing acquired assets, liabilities, and intangibles under ASC 805.
Purchase price allocation under ASC 805 requires identifying and fair-valuing every acquired tangible and intangible asset, from customer relationships and developed technology to trade names and non-compete agreements, within a tight measurement period before the allocation must be finalized
Finance teams often lean entirely on outside valuation specialists for the full analysis, which is expensive and slow, or attempt an in-house allocation without the structured process needed to identify all identifiable intangibles and select defensible valuation methods
Missing an identifiable intangible asset, misapplying a valuation method, or failing to tie the allocation back to goodwill correctly creates audit friction and can require restatement if caught late
Coordinating deal documents, target company financials, and valuation inputs across corporate development, accounting, and outside advisors during the measurement period is an intensive, deadline-driven effort
The agent ingests the acquisition agreement, target company financial statements, and due diligence materials to build an initial inventory of acquired tangible and intangible assets, screening systematically against common intangible asset categories such as customer relationships, developed technology, trade names, and backlog. It applies appropriate valuation methods, income approach for customer relationships and technology, relief-from-royalty for trade names, cost approach for fixed assets, using target financial data and market-based assumptions, and calculates the resulting goodwill as the residual. Draft allocation schedules, supporting valuation workpapers, and the resulting deferred tax and amortization schedules are compiled for review by the deal team and auditors within the measurement period.
Inventory Acquired Assets
- Extract asset and liability detail from the acquisition agreement and target financials
- Screen for identifiable intangible assets by category
- Confirm the initial opening balance sheet at acquisition
Apply Valuation Methods
- Select and apply appropriate valuation methods per asset category
- Build supporting valuation models using target financial and market data
- Calculate fair values for tangible and intangible assets
Calculate Allocation and Goodwill
- Allocate purchase consideration across valued assets and liabilities
- Calculate resulting goodwill as the residual
- Determine deferred tax impacts of the allocation
Compile Documentation and Amortization
- Draft supporting valuation workpapers per asset
- Build post-acquisition amortization schedules for intangibles
- Package the allocation memo for auditor and measurement-period review