Research On Company A's Purchase Price Allocation Issues

The introduction and application of fair value measurement attribute in accounting field have been widely applied to make the assessment service field continue to be extended to produce asset evaluation for the purpose of financial reporting.The merger price is a specific application of fair value in China.It is also one of the difficulties and priorities for the purpose of the assessment.In recent years,with the gradual improvement and development of China's capital market,the M&A activity is increasing day by day.In the business combination under the different control,the merging party should share the merger price on the merger date and confirm that the fair value of the acquired purchaser's identifiable assets,liabilities and contingent liabilities.Therefore,the merger valuation assessment has become an increasingly important issue.This paper firstly analyses the relevant theories and methods of the merger evaluation and has its particularity compared with the traditional evaluation.The merger evaluation object is more complex and comprehensive.Then,a case study of Company A's merger valuation is presented.The case shows a systematic process of assessing the fair value of identifiable assets and liabilities of Company A on the basis of the valuation date,which in turn leads to the basic steps and models of the assessment process of consideration.Also,the difficulties of the apportionment are analyzed.Through the summary and analysis of the cases,the paper puts forward some shortcomings in the evaluation process including the valuation of intangible assets,the problem that value of goodwill unable to reflect the real long-term excess returns and the overall rationality of the test is not the accurate problem.In this paper,we also improve the discount rate used in the assessment of the income method and consider the value of the amortized tax revenue of the intangible assets in the assessment of the identifiable intangible assets.We use the cut difference method to evaluate the value of goodwill,to confirm the value of goodwill and then we use the method of comparison between WARA and WACC to carry out the overall rationality test.Lastly,we further analyze the rationality through the construction of the financial index system,to better guarantee the rationality of the results of the apportionment.