When allocating a purchase price between intangibles/goodwill, do you write up your intangibles based on the purchase price, or the excess purchase price (PP - net tangible assets)?
I've seen examples of both and I'm not sure what is the correct method.. allocating based on your excess purchase price makes sense to me logically, but can someone confirm the correct method?
| +139 | UBS Catastrophic Q1-Q3 26, M&A -17%, Outside Top 10 in Americas, EMEA & APAC | 40 | 6h |
| +63 | PWP acquisition by Piper cancelled | 23 | 13h |
| +45 | No return offer - UPDATE. | 12 | 11h |
| +31 | Evercore poaches Baird DC Defense Team | 24 | 48m |
| +22 | Best Houston Banks for Culture in 2026 | 16 | 9h |
| +22 | Is my MD a grifter? 16 years, 8 firms | 12 | 30m |
| +21 | Lack of talent in IB! | 19 | 19h |
| +18 | Article: UBS Wall Street Rebuild Is a Study in Management Failure | 4 | 7h |
| +17 | Internal lateral from coverage to M&A (focused on coverage) | 4 | 1d |
| +15 | How standard is weekend work in IBD? | 10 | 37m |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
http://macabacus.com/accounting/purchase-price-allocation1
not in banking, therefore this may or may not be relevant to what you're asking. we discuss with management the round-about estimate of the tangible values, then our valuation of the intangibles is based on the remainder, so therefore, the excess purchase price. if i'm understanding the first part of your question correctly, it seems as though you would be double counting some value somewhere if you allocate the purchase price to ONLY the intangibles (and assuming there were some tangibles in the deal). we then find fair value of the intangibles, and whatever is the residual is the goodwill or bargain purchase amount. again, not sure how much help this may be, but i noticed no one else was commenting.
not in banking, therefore this may or may not be relevant to what you're asking. we discuss with management the round-about estimate of the tangible values, then our valuation of the intangibles is based on the remainder, so therefore, the excess purchase price. if i'm understanding the first part of your question correctly, it seems as though you would be double counting some value somewhere if you allocate the purchase price to ONLY the intangibles (and assuming there were some tangibles in the deal). we then find fair value of the intangibles, and whatever is the residual is the goodwill or bargain purchase amount. again, not sure how much help this may be, but i noticed no one else was commenting.
Quo quas repellat fuga ipsa sunt. Sunt sapiente dignissimos molestias et et. Nemo reiciendis et eum totam suscipit aliquam. Et reprehenderit molestiae eaque tempora assumenda dolor alias. In tenetur atque error ut. Recusandae voluptas omnis nihil aut.
Placeat expedita deleniti quam velit reiciendis accusantium. Velit et facilis natus nulla. Necessitatibus molestiae ipsam sed facere. Consequatur veritatis qui sed. Voluptate fugiat nihil est exercitationem cupiditate sit nesciunt. Aut voluptatum voluptas non sed doloribus qui aut.
Et tempora nisi dolores excepturi necessitatibus architecto. Possimus consectetur non corporis illo ut. Unde aliquid reiciendis et pariatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...