This course will teach participants how to approach a purchase price allocation for financial reporting purposes after a business acquisition or combination closes. The course provides a summary of valuation techniques used for specific, identifiable intangible assets and provides a step by step review of sample calculations for valuing different types of intangible assets resulting from a business purchase.

The course will provide participants with tools that will allow them to prepare a purchase price allocation with less support from an outsourced advisor than they otherwise might use. It will teach participants how to segment enterprise cash flows based on capital charges and how to allocate them to different intangible assets, as well as how to assess the relative riskiness of different types of intangible assets that result from a business acquisition or combination. Also covered are methods to segment enterprise cash flows based on capital charges and how to allocate these charges to different intangible assets. Participants will learn techniques for assessing the relative riskiness of different types of intangible assets that result from a business acquisition or combination.

Topics Include:

• Overview and process of allocating and reconciling the purchase price following a business acquisition
• Valuation techniques relating to intangible assets such as trademarks, technologies, trade secrets, non-competition agreements, workforces, customer relations, and order books

NOTE: No updates or changes were made to the 2024 version of this course. If you completed the course in 2021, 2022 or 2023, please be advised the 2024 course material has not changed. If you have any questions, please contact pdevents@cpaontario.ca.

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By the end of this course, participants should be able to:

• Identify different types of intangible assets that result from a business acquisition or business combination and develop a purchase price allocation framework.
• Utilize excess earnings approaches to intangible asset valuation and royalty relief methods to value different identifiable intangible assets.
• Apply capital charges to different types of intangible assets in order to develop a cash flow stream that can be quantified and valued, as is required in the valuation of identifiable intangible assets.
• Reconcile the valuation of individual intangible assets with an overall business purchase price and will solve for the value of goodwill in a purchase price allocation.