What is Purchase Price Allocation? Demystifying its Role in M&A Transactions
In M&A transactions, understanding key components is paramount, and one such vital element – an element not always eloquently detailed – is Purchase Price Allocation (PPA).
PPA is a systematic process of assigning the purchase price to acquired assets and liabilities. In the sale of businesses, purchase price allocation stands as a key framework impacting the after-tax benefits for sellers and buyers. And so, suffice it to say, understanding PPA becomes crucial to framing the deal structure to create equitable division of tax costs and benefits of M&A transactions.
We’ll take a pragmatic journey through the Purchase Price Allocation process, starting from foundational concepts and delving into its components, objectives, and the array of benefits it offers. The value of this article will be for you as the seller, to see PPA as not just a procedural step but a strategic tool shaping the success of your exit strategy.
Read the full article at the link below.
https://lnkd.in/g6bxu6dN
#M&A #mergersandacquisitions #businesssale #exitoptions
Student of ICAP The institute of chartered accountants
1wVery informative