MILES / Financial Reporting Valuation
Purchase Price Allocation (PPA)
Understand the value of acquired assets and establish a valuation basis for business combination accounting.
Discuss Your Acquisition’s PPA Requirements
Following an acquisition, a business needs to understand which identifiable assets it has acquired and how their values should be reflected in its financial statements. Brands, customer relationships and technology may need to be identified and measured separately from goodwill.
MILES provides Purchase Price Allocation (PPA) valuation support, helping businesses analyse acquired operations, identify relevant intangible assets and establish valuation inputs for business combination accounting under HKFRS 3 / IFRS 3.
When should you speak with us?
- You have completed a business acquisition and are preparing the related financial reporting.
- A transaction is approaching completion and you want to understand valuation information requirements early.
- The acquired business owns brands, technology, customer relationships or other significant intangible assets.
- The transaction includes contingent consideration or other arrangements requiring valuation analysis.
- Your auditors require further support for asset identification, valuation methods or parameters.
How we help
Understand the transaction and business model
We review transaction documents, acquisition background and the acquired business’s revenue sources. We work with management and accounting advisers to clarify the valuation purpose, acquisition date and scope of work.
Identify identifiable intangible assets
We consider contractual rights, business operations and asset characteristics to analyse items that may require separate identification, such as brands, trademarks, customer relationships, technology and contract-related assets.
Select appropriate valuation methods
We select methods that reflect each asset’s economic characteristics and the available information, explaining the basis for revenue forecasts, useful lives and relevant valuation parameters.
Support the purchase price allocation analysis
Within the agreed scope, we value relevant assets, liabilities or transaction arrangements, providing results to support management’s PPA analysis and explaining how the valuations relate to the goodwill calculation.
Provide reporting and auditor support
We prepare valuation reports and explanations of key assumptions, and respond to auditors’ questions on asset identification, methodology and valuation results.
What information is typically required?
- Acquisition agreements and key transaction terms
- Acquisition structure, consideration arrangements and relevant dates
- Financial information and business forecasts for the acquired business
- Information on customers, brands, technology and significant contracts
- Management’s acquisition analysis and financial reporting timetable
We tailor the information request to the nature of the business so that your team can prioritise the materials most relevant to the analysis.
Frequently asked questions
Does every acquisition require a PPA under IFRS 3?
The first step is to determine whether the transaction is a business combination within the scope of the relevant standard. Asset acquisitions and transactions under common control may require different accounting treatments. The valuation scope should reflect the accounting basis established by management and its accounting advisers.
If the acquired company has no intangible assets on its balance sheet, is an assessment unnecessary?
Not necessarily. A business combination may involve intangible assets that were not previously recognised in the acquired company’s own financial statements but meet the criteria for separate recognition. The analysis should consider the assets’ characteristics and the applicable standards.
When should we start?
Information requirements can be considered during transaction planning or due diligence, with valuation work progressing once the transaction terms and relevant dates are confirmed. Early planning helps allow time for analysis and discussions with auditors.
Accounting standard: IFRS 3
Prepare for post-acquisition financial reporting
Share your transaction overview, details of the acquired business and expected reporting date. We will discuss the PPA valuation scope, information requirements and work plan with you.
Enquire About PPA Valuation Services