Fair Value Purchase Price Allocations and Impairment Valuation Analyses for Healthcare Company
April 15, 2019
Situation
A company’s external auditor referred Cherry Bekaert to one of the largest nationwide healthcare services companies needing assistance with fair value purchase price allocations pursuant to ASC 805. Purchase consideration included contingent earn-out based on the target company’s meeting future EBITDA thresholds in the next three years.
Cherry Bekaert’s Guidance
The Valuation team worked closely with the company’s management to understand the terms of the purchase agreement and assist them to identify the identifiable intangible assets and the key provisions triggering the earn-out consideration.
Result
The client was very pleased with Cherry Bekaert’s service delivery within the promised timeframe, as well as the Firm’s prompt responses and support provided to the client’s external auditors. Further, the client engaged the Valuation team for subsequent annual impairment analysis for goodwill and indefinite-lived intangible assets (ASC 350) for financial reporting purposes and additional ASC 805 purchase price allocations for acquisitions of other target companies along the years.