Purchase Price Allocation (ASC 805)
A purchase price allocation assigns the price paid in an acquisition to the acquired assets, identifiable intangibles, and goodwill under ASC 805. FMV prepares it for the acquirer's financial reporting and documents it for the auditor.
Signed by a credentialed analystFairMarketValue
Acquisition of Summit Field Services
At a glance
- Basis
- ASC 805 (Business Combinations) and ASC 820 (Fair Value Measurement)
- Prepared by
- A credentialed FMV valuation analyst
- Deliverable
- Signed report (PDF)
- Used by
- Accounting firms
- Delivered to
- The ordering bank's or firm's vault and the client's vault
When it is needed
- After closing an acquisition that must be reported under U.S. GAAP.
- When an auditor asks for support behind recorded intangibles and goodwill.
What the report contains
- Identification and valuation of acquired intangibles
- Useful lives and amortization schedule, with support
- Documentation prepared for audit
- Responses to auditor questions
Last updated October 24, 2026
Standards and sources
- ASC 805
- Recognition and measurement in a business combination
- ASC 820
- Fair value hierarchy and techniques
- AICPA Accounting and Valuation Guide
- Assets acquired to be used in R&D activities, where relevant
Documents we need
- Purchase agreement
- Target financial statements
- Closing balance sheet
- Deal model
- Business description or CIM
How an engagement works
Scope
We confirm the purpose, standard of value, valuation date, and addressee, then issue the engagement letter.
Intake
You or your client upload documents against a checklist. Open items stay visible until the file is complete.
Analysis
A credentialed analyst prepares the valuation and signs the conclusion.
Delivery
The signed PDF goes to your vault and your client's. We keep the workfile for later questions.
Purchase price allocation questions
What is a purchase price allocation?
A purchase price allocation (PPA) is the measurement of the fair value of assets acquired and liabilities assumed in a business combination under ASC 805, with any remaining consideration recorded as goodwill. FairMarketValue (FMV) prepares the allocation, useful lives, and amortization schedule for the acquirer and its auditor.
Which intangible assets does a purchase price allocation value?
A purchase price allocation typically values customer relationships, trade names, developed technology, non-compete agreements, and backlog, depending on what the acquired business owns.
How long does a company have to finalize a purchase price allocation?
ASC 805 allows a measurement period of up to one year after the acquisition date to finalize the amounts recorded in a business combination.
Do private companies have a simpler option?
Yes. Private companies may elect the private company alternative under ASU 2014-18, which allows them not to recognize certain customer-related intangibles and non-compete agreements separately from goodwill.
What documents does a purchase price allocation require?
A purchase price allocation requires the purchase agreement, target financial statements, the closing balance sheet, the deal model, and a business description or confidential information memorandum.
How is the fee for a purchase price allocation set?
FMV quotes the fee for a purchase price allocation after reviewing the scope. The fee is fixed before work starts and does not depend on the conclusion of value.
Trust and reliability
SOC 2 Type II and ISO 27001 audits are underway. Our security program is documented in the FMV Trust Center.
Get a fixed-fee quote
Tell us the purpose, the company, and the valuation date. We confirm scope and quote a fixed fee before work begins.