Business Combinations/Purchase Price Allocation

Kroll's expertise and independence has made us a leading provider of valuation services for business combinations.

Our professionals have an in-depth understanding of financial reporting valuation requirements pursuant to International Financial Reporting Standard 3: Business Combinations (IFRS 3), Accounting Standards for Private Enterprise 1582: Business Combinations, (ASPE 1582) and ASC 805, Business Combinations (ASC 805) enabling us to offer practical insights into key issues of concern to clients, auditors and regulators.

IFRS 3 and ASC 805 are standards with a high degree of convergence, although certain differences between the two remain. Under both IFRS 3 and ASC 805, the purchase price of an acquisition is allocated to the identifiable assets acquired and liabilities assumed at fair value, with limited exceptions. The identifiable finite-lived assets are then depreciated/amortized over their remaining useful lives.

Kroll can help you address complex valuation issues arising in the context of IFRS 3 and ASC 805 throughout the transaction continuum, including:

  • Pre-acquisition pricing analysis, including estimation of accretion/dilution impact on earnings by providing preliminary values and economic lives for assets to be acquired
  • Valuation or structuring of contingent consideration with our team of specialists in our Strategic Value Advisory practice and modeling potential future earnings impact
  • Valuation of contingent assets and liabilities
  • Pro-forma allocations required for filings with the OSC, the SEC and other regulators
  • Acquisition-date fair value measurement of the consideration transferred, any previously-held equity interests and any remaining non-controlling interests
  • Acquisition-date fair value measurement and economic life analysis of acquired real estate, machinery and equipment and identifiable intangible assets, including brands, technology, in-process research and development and customer relationships
  • Fair value measurement of contract liabilities (a.k.a. deferred revenue) and other liabilities
  • Valuation of options to buy/sell equity interests
  • Valuation of derivatives and other financial instruments and their subsequent mark-to-market, when required
  • Allocation of purchase price and goodwill to cash generating units, (reporting units)
  • Legal entity valuations for tax purposes in connection with the business combination

Fairness and Solvency Opinions

Duff & Phelps Opinions is a global leader in Fairness Opinions and Special Committee Advisory, ranking #1 for total number of fairness opinions in the U.S., EMEA (Europe, the Middle East and Africa), Australia and Globally in 2023 according to LSEG (FKA Refinitiv).

Business Valuation Services

Kroll is the largest independent provider of business valuation services.

Mergers and Acquisitions (M&A) Advisory

Kroll’s investment banking practice has extensive experience in M&A deal strategy and structuring, capital raising, transaction advisory services and financial sponsor coverage.