Overview
When a business is acquired, the purchase price is allocated to identifiable assets and liabilities at fair value, with the remainder recognised as goodwill. This is required under IFRS 3 and Ind AS 103.
Key points
- Identifies and values intangible assets such as brands and customer relationships
- Allocates purchase price to tangible and intangible assets
- Determines goodwill or bargain purchase gain
- Required for financial reporting after a business combination
- Affects future depreciation, amortisation and tax
Typical documents required
- Acquisition agreement and consideration details
- Target's financial statements
- Fixed asset register and intangible asset details
- Projections of the acquired business
How we work
Review of the transaction
Identification of assets
Fair value measurement
PPA report and audit support
Frequently asked questions
When is PPA needed?
After acquiring control of a business, for reporting under IFRS 3 or Ind AS 103.
Does PPA affect tax?
It can affect amortisation and deferred tax, so tax and finance teams should review the results.
This page gives general information and is not legal or tax advice. Requirements change, so confirm current rules for your situation with us before acting.