Goodwill and Bargain Purchases: The Essentials of PPA

As we enter a phase of consolidation, mergers and acquisitions have become a vital component of inorganic growth strategies. Post-transaction, it is crucial for the acquiring company's management to rationalize the purchase price paid as part of their financial reporting obligations. This process, known as Purchase Price Allocation (PPA), is essential for appropriately allocating the purchase price against the identifiable assets and liabilities under the relevant accounting and valuation frameworks.

At Aranca, we have effectively tackled reporting obstacles inherent in M&A transactions, empowering clients with audit ready reports and proactively mitigating future impairment risks.

With a track record of assisting numerous clients, we specialize in navigating the valuation challenges associated with business combinations accounting, including Bargain Purchase accounting, under both IFRS and US GAAP frameworks. Our seasoned team of experts adeptly applies its knowledge of accounting standards to a diverse array of intricate valuation scenarios, producing robust and defensible valuation reports. This capability significantly supports CFOs and Accounting Comptrollers in meeting their tight timelines with confidence.

The attached document outlines the preliminary understanding of goodwill and bargain purchase that the makers and users of financial statements should understand before delving into the detailed specifics.