Business Combinations
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Accounting for most business combinations involves a complex process of valuing acquired intangible assets and elements of purchase consideration. Commonly identified intangibles include developed technology, customer relationships, and trade names. Valuations may also be required for machinery and equipment, real estate, and inventory. Additionally, purchase consideration may necessitate valuations of debt, equity, or earn-outs offered to the seller.
Valuation analysis is far from a formulaic calculation. It requires leveraging regulatory requirements, authoritative and non-authoritative guidance, financial theories, third-party data, and extensive modeling. The process often entails management interviews and in-depth audit reviews, all of which must be completed before finalizing the valuation report. Furthermore, complex accounting rules often necessitate ongoing valuation support for years following the initial purchase price allocation.
WHY SORBUS
With over 20 years of dedicated purchase price allocation experience, Sorbus Advisors offers a unique depth and breadth of expertise required to successfully complete these multifaceted valuation engagements.
In a typical engagement, we identify the intangibles and financial instruments to be valued, determine the most appropriate valuation methodologies, and estimate the values of intangibles and purchase consideration (as needed). In a full-scope engagement, our clients receive detailed calculations, a narrative report, and support with audit review procedures.
We deep-dive into SEC filings for purchase accounting benchmarks, track the never-ending stream of valuation guidance, and follow accounting rules to lead clients seamlessly through the process.
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