PPA Valuation for US-based company
Valtech’s Valuation Team has recently concluded a Purchase Price Allocation (PPA) valuation for a US-based company with securities traded over-the-counter (OTC). Following the acquisition of a Hong Kong-based smart Internet of Things (IoT) company, in adherence to the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805 Business Combinations, the acquirer is obligated to perform a PPA valuation to allocate the purchase price among the acquired company’s identifiable assets and liabilities.
The identification of intangible assets during the PPA valuation process is a complex undertaking, demanding a comprehensive understanding of the acquiree’s business model and its value drivers. Our seasoned valuation team, engaging in a series of communications with the acquiree’s management team, successfully pinpointed several key customer-based intangible assets under the applicable accounting framework. These assets were meticulously valued using commonly accepted approaches for intangible asset valuation.
This rigorous process ensures not only compliance with accounting standards but also provides a thorough and accurate representation of the acquired company’s assets and liabilities. The expertise of our valuation team, coupled with effective communication with the acquiree’s management, enhances the precision of the valuation outcomes, contributing to the acquirer’s transparency and reliability of our financial reporting.
As we continue to strengthen our global presence, these meticulous valuation practices remain integral to our commitment to sound financial governance and reporting.