IFRS 3 Purchase Price Allocations for Audit-Ready Valuation

Get expert, IFRS 3-compliant Purchase Price Allocation (PPA) valuations tailored to your transaction. At Alpha Valuations, we specialise in identifying and valuing tangible and intangible assets post-acquisition, providing audit-ready reports trusted by boards, auditors, and legal teams.

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What is a Purchase Price Allocation?

Purchase Price Allocation (PPA) is a financial reporting requirement under IFRS 3, used to break down the purchase price paid in a business acquisition into tangible assets, identifiable intangibles, liabilities, and the resultant goodwill or bargain purchase.

Our role is to independently determine the fair value of each component, ensuring your reporting is compliant, accurate, and audit-ready.

Why is Purchase Price Allocation Important?

Purchase Price Allocation (PPA) is a vital step in financial reporting after a business acquisition. It ensures the total purchase price is accurately allocated between tangible and intangible assets, liabilities, and the resultant goodwill or bargain purchase, as required by IFRS 3.

A properly conducted PPA enhances transparency, aligns with regulatory standards, and gives stakeholders a clear view of how value was allocated in the transaction. It can also impact future earnings through depreciation and amortisation, making it essential for both compliance and informed decision-making.

Whether you’re navigating a merger or completing an audit, a defensible PPA provides clarity, credibility, and long-term financial accuracy.

How to Calculate Purchase Price Allocation

Our Purchase Price Allocation (PPA) process follows global standards, supports IFRS compliance, and delivers defensible, audit-ready reports tailored to your transaction.

1. Review the
Transaction

We begin by analysing the sale agreement and identifying the total purchase consideration, including cash paid, debt assumed, and any contingent payments.

4. Allocate Residual to Goodwill

Once all identifiable assets and liabilities are valued, any remaining difference is allocated to goodwill, representing future economic benefit not tied to specific assets.

2. Identify the Acquired Assets and Liabilities

We work closely with your finance and legal teams to confirm the assets and liabilities acquired, including tangible assets, working capital, and debt positions.

5. Deliver a Compliant, Clear PPA Report

We prepare a detailed, audit-ready Purchase Price Allocation report that aligns with IFRS 3 requirements, supporting your financial reporting and ensuring transparency.

3. Value Identifiable Intangible Assets

Using appropriate methods such as Relief-from-Royalty or Multi-Period Excess Earnings, we value key intangible assets like brands, customer relationships, and proprietary technology.

SARB, LEGAL AND STATUTORY VALUATIONS

This service is aimed at clients who need the opinion of an expert valuer for statutory, regulatory, or legal purposes or for arriving at negotiated settlements of disputes.

Our SARB, Legal and Statutory Valuations experience includes: