In business combination, deal considerations usually do not match the real asset values of the target company. In most cases, transaction values are usually higher than the value of targets' real assets. The transaction premiums reflect the fact that acquirers often pay more attention to the potential value appreciation from the transaction, instead of the acquired real assets themselves.
One source of the the value appreciation might come from the targets specific strength such as brand, knowhow and customer relationship, which can be identified as intangible assets that are not reflected in the targets' financial statements. This further entails difficulties and complexities in the subsequent financial reporting procedures, such as purchase price allocation. How to quantify those intangible assets on an objective and fair basis for financial consolidation, has been of great concerns to many colleagues from finance and audit divisions.
In this regard, we prepared this webinar to provide some ideas in the valuation of the identifiable intangible assets involved in business combinations.