After an acquisition closes, the buyer must account for what it has bought, and that is where Purchase Price Allocation (PPA) comes in. Valtech Valuation provides independent PPA valuations that identify and measure every acquired asset and liability at fair value, giving auditors and stakeholders a reliable basis for goodwill and intangible asset accounting.

What Is Purchase Price Allocation?

Under IFRS 3 / HKFRS 3 Business Combinations, an acquirer must recognise the identifiable assets acquired and liabilities assumed at their acquisition-date fair values. The purchase consideration is allocated across those items, and any excess over the net identifiable assets is recognised as goodwill. A shortfall is a bargain purchase gain. The PPA directly affects future depreciation, amortisation, impairment testing and reported earnings.

Our PPA Process

  1. Measure the consideration – including cash, shares, deferred and contingent consideration such as earn-outs.
  2. Restate tangible assets and liabilities – step up or write down book values to fair value, including property, plant and equipment, inventory and debt.
  3. Identify intangible assets – recognise intangibles that meet the separability or contractual-legal criterion of IAS 38.
  4. Value each intangible – using relief-from-royalty, multi-period excess earnings, with-and-without and cost methods.
  5. Reconcile and test – compare the implied internal rate of return, WACC and weighted average return on assets (WARA) to confirm the allocation is coherent.

Identifiable Intangible Assets in a PPA

  • Customer contracts and customer relationships
  • Internet domain names, patents and trademarks
  • Brand names, copyrights and concession rights
  • Licences and permits (industry-specific)
  • Order backlog, technology and software
  • Profit guarantees and non-compete agreements

An assembled workforce is not recognised as a separate identifiable intangible under IAS 38; its value is subsumed into goodwill.

Complex PPA Situations We Handle

  • IFRIC 12 service concession arrangements, including fair value of financial assets and intangible assets
  • Complex consideration such as earn-outs, profit guarantees, convertible bonds and convertible preference shares
  • Assessment of synergies and their treatment in the allocation
  • Targets with a large pool of project companies or multiple business segments
  • Targets with companies in different countries and currencies

Trusted by Public Companies and Multinational Corporations

Valtech Valuation is an independent valuation and transaction advisory firm with offices in Hong Kong and Singapore. Our clients range from Fortune 500 companies and publicly listed groups to private equity funds, family offices and high-growth startups, with engagements across Hong Kong, Mainland China, Singapore, Southeast Asia, the Middle East and the United States. Listed companies and multinationals rely on our PPA reports for audited financial statements, where the valuation must stand up to auditors and regulators.

Why Appoint Valtech Valuation for Reliable International Valuation Services

  • Independent and defensible conclusions – objective, well-documented reports prepared to withstand audit, regulatory and investor scrutiny.
  • ISO 9001 certified quality management – a certified quality process for consistent, reliable results on every engagement.
  • Proven with listed companies and multinationals – experience supporting publicly listed groups, US-listed firms and Fortune 500 companies on financial reporting and transaction valuations.
  • International reach, local expertise – offices in Hong Kong and Singapore serving clients across Asia, the Middle East and the United States, including cross-border assignments.
  • Technology-enabled valuation – data analytics, business intelligence tools and proprietary applications improve transparency and efficiency.
  • Multi-disciplinary qualified team – accounting, finance, risk management, surveying and business valuation professionals working together on each engagement.

Professional Credentials of Valtech's Team

  • PhD holders
  • Certified Public Accountants – CPA (HKICPA)
  • Chartered Financial Analysts – CFA
  • Financial Risk Managers – FRM (GARP)
  • Chartered Valuation Surveyors – MRICS (Royal Institution of Chartered Surveyors)
  • Accredited in Business Valuation – ABV (AICPA)
  • Certified Valuation Analysts – CVA (Singapore)
  • Certified Public Valuers – CPV (China Appraisal Society)

Request a PPA Valuation Proposal

Tell us about the acquisition, the completion date and your reporting deadline, and we will prepare a tailored proposal.

Get a Valuation Quote →