Purchase Price Allocations
ASC 805 allocations and financial-reporting valuations, built to hold up under audit review.
When a client closes an acquisition, the valuation work has to hold up
An ASC 805 purchase price allocation touches nearly every line of the post-acquisition balance sheet. Goodwill, identifiable intangible assets, tangible asset adjustments, deferred tax liabilities, and noncontrolling interests each call for defensible valuation work that withstands audit scrutiny. For an audit team, the specialist behind that work matters. The wrong choice means rework, delays, and difficult conversations with the client. The right choice means a clean deliverable, methodology documented the way reviewers need to see it, and a valuation professional who understands what an auditor is looking for.
What Eubank Capital delivers in a PPA engagement
Every ASC 805 engagement produces a complete allocation supported by detailed methodology documentation. A typical engagement covers the following.
Mapping the full transaction structure, including cash, seller notes, earnouts, noncontrolling interests, and any non-standard components of the deal.
Scoping the identifiable intangible assets under ASC 805 and valuing each with the appropriate method, including multi-period excess earnings for customer relationships and relief-from-royalty for trade names and technology. Contributory assets such as assembled workforce are valued by the cost approach to support the analysis, with other methods applied as the asset profile requires.
Fair value adjustments to property, plant, and equipment using the cost approach, with appropriate price indices, useful-life analysis, and functional and economic obsolescence considerations.
Evaluating whether book values approximate fair value or call for adjustment, including inventory step-up analysis where applicable.
Weighted average cost of capital and asset-specific return calculations using a build-up approach with market-supported inputs.
When the acquired interest is less than 100 percent, rigorous analysis of DLOC and DLOM supported by empirical data and the specific terms of the governing documents.
Residual goodwill determination and, where applicable, the tax allocation required under the Internal Revenue Code.
Computing the deferred tax liability that arises from the book and tax basis differences created by the allocation.
The final deliverable is a comprehensive valuation report with a calculation letter that documents every methodology, input, and conclusion, ready for the audit file.
Built for complex transactions
Eubank Capital has performed ASC 805 allocations across a range of deal structures and industries, including multi-entity acquisitions involving four or more businesses acquired at once, each requiring its own independent allocation. Recent engagement experience includes multi-entity private-equity acquisitions with complex operating-agreement structures; transactions with significant identified intangible assets across multiple asset classes; acquisitions of both minority and majority interests requiring detailed discount analysis; engagements spanning fourteen or more exhibit schedules with full workpaper documentation; and purchase prices ranging from single-digit millions to the mid-eight figures.
This is not a sideline. Purchase price allocation work requires deep fluency in ASC 805, in the income and cost approaches to asset valuation, and in the documentation standards audit teams rely on. That is what Eubank Capital delivers.