Purchase Price Allocation

The allocation of purchase price following an acquisition can significantly affect the acquirer's financial reporting for many years. Corporate combinations generally can be accounted for as either pooling of poling of interests or purchase. In a pooling of interests, the financial statements of all parties to the transaction are added together without adjustment to create the statements of the new entity. For purchase accounting, newly acquired assets and liabilities, both tangible and intangible, should be restated at fair market value on the purchaser's books. The excess of purchase price paid over net assets acquired must be booked as goodwill, which is amortized over as many as 40 years under current accounting standards. If the purchase price paid is less than the value of the identifiable assets and liabilities, their values will be reduced pro rata until equality is achieved.

Adams Capital's purchase price allocation services provide acquiring businesses the following benefits:

• Accurate financial reporting


• Potential tax savings


• Potential earnings enhancements


• Maximization of cash flow

We assess and report tangible assets' functional and economic obsolescence, physical condition, and maintenance. Our findings include location and depreciable life category in an easy to use format, suitable for financial and tax reporting purposes. Digital reporting facilitates conversion of our appraisal results into a fixed asset reporting system. Our work plan is designed to reduce management work effort through careful planning and execution by knowledgeable appraisal professionals.

Our staff includes engineers, accountants, financial analysts, and attorneys who focus only on valuation issues. Please contact us for further information about our purchase price allocation services.

For permission to reproduce or quote this brochure, please contact info@adamscapital.com.

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©Copyright 2005, Adams Capital, Inc.
Updated April 2005
Adams Capital, Inc. - Business Valuation Services
600 Galleria Parkway, Suite 1850, Atlanta, GA 30339
770-432-0308 FAX 770-432-4138

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