We make value tangible.

Making the value of an acquisition visible

Every acquisition is based on expectations for the future: valuable customer relationships, innovative technologies, established product and corporate brands, or access to new markets. A Purchase Price Allocation (PPA) makes these value drivers transparent and provides the basis for a clear and well-documented accounting treatment of the transaction.

Grant Thornton supports investors, corporate groups and private equity firms in identifying, valuing and clearly documenting the assets acquired as part of a transaction.

We advise on and perform purchase price allocations under International Financial Reporting Standards (IFRS), the German Commercial Code (HGB) and for tax purposes. We combine valuation expertise, transaction experience and accounting know-how to deliver practical, audit-ready solutions.

Because a good PPA takes more than valuation expertise

The valuation needs to be right—and so does the process that leads to an audit-ready result.
Focused on the deal

We combine valuation, accounting and audit expertise to develop practical solutions— even under tight deadlines.

Clear path to reliable results

Years of PPA experience and clear, timely communication help ensure efficient processes and robust results.

Across borders

Through our global network, we support cross-border transactions involving different accounting standards.

HGB, IFRS and beyond

Confidence across accounting frameworks

We support purchase price allocations under IFRS, HGB and tax requirements—from pre-deal analysis through to subsequent measurement.

Even before a transaction closes, we help you understand and assess the accounting and earnings impact of a planned acquisition.

Typical questions include:

  • Which intangible assets are likely to be identified?
  • What impact will the acquisition have on future earnings?
  • What level of goodwill should be expected?
  • How will key financial metrics change following the acquisition?

After the transaction closes, we guide you through the entire PPA process:

  • Analysing the transaction structure, purchase agreement, business plan and the target’s financial and operational value drivers, including complex purchase price components such as earn-outs
  • Working with you to identify the assets and liabilities acquired
  • Valuing tangible and intangible assets—such as intellectual property, marketing-related assets and customer-related assets—at fair value using recognised valuation methods
  • Determining robust valuation assumptions, including WACC, useful lives, growth and attrition rates, and market-based assumptions
  • Calculating goodwill and deferred taxes
  • Discussing the results with you and preparing full documentation
  • Supporting discussions with management, investors and auditors

We continue to support you after the purchase price allocation is complete, including with:

  • Impairment tests
  • Subsequent valuations and updates
  • Reporting and disclosure requirements

Experts who understand your deal—and are here for you

Prof. Dr Thomas Senger

Partner
Duesseldorf  Office
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Dr Lüder Kurz

Senior Manager
Duesseldorf  Office
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Jochen Fecher

Partner
Frankfurt am Main  Office
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Alexander Murrmann

Partner
Berlin  Office
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      Frequently asked questions about purchase price allocation (PPA)

      A PPA determines how the purchase price is allocated to the assets and liabilities acquired. It therefore affects future depreciation and amortisation, impairment tests and key performance metrics.

      A professionally prepared purchase price allocation provides:

      • Transparency over the assets acquired and their value drivers
      • Clarity on future earnings impacts
      • A reliable basis for reporting and integration
      • Confidence when coordinating with management, investors and auditors
      • Protection against unexpected accounting impacts later on

      We support you with purchase price allocations and related valuations under IFRS and HGB, as well as for tax purposes. This includes, in particular, IFRS 3, IAS 38, IAS 36 and DRS 23. For cross-border transactions, we also take the relevant accounting requirements into account.

      Ideally, the PPA should be prepared early—if needed, before closing. A pre-deal PPA can highlight potential impacts on goodwill, depreciation and amortisation, and earnings metrics at an early stage. The final purchase price allocation is completed after the transaction closes, based on the information available at that time.

      The type and scope of documentation depend on the transaction. We typically need:

      • The purchase agreement and information about the transaction structure
      • Purchase price components, including any earn-outs
      • The business plan and current financial data
      • Information about products, customers, technologies and brands
      • Details of existing assets and liabilities
      • Relevant contracts and tax information

      We will work with you at the start of the project to identify the documents required for your specific situation.

      The timeframe depends on the size and complexity of the transaction, the number of assets to be valued and the availability of the required information. In many cases, a PPA can be completed within a few weeks. Starting early and setting clear coordination channels can significantly speed up the process.

      HGB and IFRS differ in how certain assets are recognised, measured and accounted for subsequently, as well as in their treatment of goodwill. Key differences include:

      • Which intangible assets are recognised separately
      • How useful lives and depreciation and amortisation are determined
      • How deferred taxes are accounted for
      • How residual goodwill is recognised and subsequently reviewed

      Under IFRS, goodwill is generally not amortised but is tested regularly for impairment. Under HGB, it is amortised over its expected useful life. If that life cannot be reliably estimated, HGB specifies a period of ten years.

      We take the relevant requirements into account from the outset and tailor our approach and documentation to the applicable accounting standard.

      Hidden reserves are differences in value that are not fully reflected in the acquired company’s existing financial statements. They arise when an asset’s current value exceeds its carrying amount.

      As part of the purchase price allocation, these differences are identified and—depending on the applicable accounting standard—recognised through a revaluation. Hidden reserves may relate to property, technology, brands or customer relationships.

      Simplified example: A property is carried at €2 million but is worth €3 million at the acquisition date. The hidden reserve is €1 million.

      Goodwill is the amount of the purchase price that remains after it has been allocated to the identifiable assets and liabilities and those items have been valued. It represents economic benefits that cannot be recognised individually as assets—for example, expected synergies, future market opportunities or the workforce’s know-how.

      In simplified terms:

      Purchase price minus revalued net assets = goodwill

      The amount of goodwill also affects subsequent accounting. Under IFRS, it is not amortised but is tested regularly for impairment. Under HGB, it is generally amortised over its expected useful life.