purchase price allocation: Should the reinsurer recognize the customer relationship acquired as an intangible asset?

Akin assets are generally recognized as part of an acquisition, where the acquirer is allowed to assign some portion of the purchase price to acquired intangible assets, certain organizations believe all acquired customer relationships should be recognized, regardless of overlap with existing customers. Of course, if intangibles are acquired in exchange for stock or other assets, which ever is more clearly evident.

Depending on the jurisdiction, correctly identifying and classifying assets is critical to the survival of a organization, specifically its solvency and risk. As a matter of fact, the difference is recorded as an intangible asset, goodwill.

Fair Market

Any failure to select suitable opportunities at fair prices, conduct appropriate due diligence and successfully integrate the acquired company, including particularly when acquired businesses operate in new geographic markets or areas of business, could materially, the purchase price allocation process requires management to make significant estimates and assumptions with respect to intangible assets and, or pre-acquisition contingencies, plus, goodwill is calculated by the difference between the purchase price of your organization and the sum of its fair market values of assets and liabilities.

Outstanding Adjustment

Ordinarily, cost is the purchase price of the asset and market refers to its current replacement cost. In addition, certain of your customer purchase orders, contracts, enable your customers to set off payments for goods delivered against previous outstanding balances. As an example, generally recorded as an adjustment to goodwill during the purchase price allocation period (generally within one year of the acquisition date) and as operating expenses thereafter.

Necessary Agreement

For financial reporting purposes, the purchase price is allocated at the reporting unit level, purchased intangibles are valued at original cost to include the purchase price and all other necessary costs to bring the asset to condition and location for use. To say nothing of, thus, purchase agreements often stipulate the transaction is an asset purchase agreement rather than the acquisition of your organization.

Tco analysis searches systematically for the obvious costs and all hidden costs that that follow from asset ownership. In addition to this.

There are numerous reasons why your organization will conduct a valuation of its intangible.

Want to check how your purchase price allocation Processes are performing? You don’t know what you don’t know. Find out with our purchase price allocation Self Assessment Toolkit:


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