Purchase Price Allocation (PPA)

An acquirer allocates the purchase price to the assets acquired and liabilities assumed at fair value on the acquisition date.

Business Combinations

 A corporation obtains control of one or more corporations or a newly formed corporation obtains control of several existing corporations. (EAS 7)

What is PPA?

The process off the recognition and measurement of acquired assets and liabilities at fair value

Guidance

EAS 7, IFRS 3, IFRS 13, ASC 805/820

When to do PPA?

The allocation period of the acquisition price:
It is a period of time that the acquiring company takes to allocate its acquisition costs to specific assets and liabilities so that the fair value of assets obtained and liabilities assumed may be identified and determined. The allocation period of the acquisition price varies depending on circumstances, but may not exceed one year after the date of acquisition.