Business Combinations

International Financial Reporting Standard 3 - IFRS 3 - requires all business combinations to be accounted for by applying the purchase method. This has largely been adopted in the Australian market place under AASB 3 and is consistent with SFAS 141R, the standard applicable for US accounting purposes.

The standards require the buyer to recognise all identifiable assets, liabilities and contingent liabilities which have been acquired in any transaction at their fair values at the acquisition date. This includes all tangible and intangible assets and goodwill. Goodwill and intangible assets with indefinite lives are no longer amortised but must then be tested annually for impairment.

Recommended by the Big 4
American Appraisal specialises in purchase price allocations (PPA's) for Australian based and cross border business combinations. We are regularly engaged to complete complex PPA assignments for Australian, UK, Chinese and US listed companies and have a strong record of working closely with our clients' Big 4 audit teams.

American Appraisal's clients value our transparent approach, our deep understanding of local regulatory issues and our independence. The strict governance requirements which prohibit auditors from undertaking valuation work for their own clients has led to AA being a preferred alternative and recommended by the Big 4 firms.

See our work on business combinations for a global grain company.