The Research On The Value Of Intangible Assets In Purchase Price Allocation

With the economic reform deepening and market system gradually standardized, merger and acquisition (M&A) between domestic enterprises are also rapidly developing. In the postmodern economy era, which is based on information and knowledge, the economic benefits of intangible assets are also becoming increasingly more important, especially in some leading industries that take intangible assets for strategic industry. New accounting standards require, as to a business combination not under the same control, the acquirer should do purchase price allocation at the acquisition date, which determining the value of intangible assets is important and difficult. To evaluate the intangible assets is not only impacting the consolidated statements of the acquisition date, but also affect the accounting profits during the future accounting periods.The main objective of this thesis is to evaluate intangible assets on the basis of qualitative research, using evaluation methods reasonable to give the intangible assets quantitatively evaluation. This thesis describes the definition of intangible assets in different disciplines and analyzes the range and the specificity of intangible assets in purchase price allocation. According to the applicability and the limitation of the assessment methods, the income approach is the most suitable. Then it focuses on the application of the income approach and gives some advices. There are five chapters in this thesis. The first part is introduction, making clear the ground, significance and related literature review.The second part describes the definition of merger and acquisition, purchase price allocation and intangible assets in every subject. On this basis, it gives the scope and specificity of the intangible assets in purchase price allocation.The third part analyzes the applicability of the cost approach, market approach and income approach in evaluating the intangible assets. Then according to the characteristics of intangible assets in purchase price allocation, choice of income approach is appropriate.The fourth chapter describes the techniques of the income approach that is applicated in purchase price allocation, including specific methods and the selection of value type and parameter. Then there is a representative case to explore the practical application of the idea and the specific operation.The last part tries to give advice to develop the valuation of purchase price allocation. The proposals are that evaluators should understand accounting standards and improve the professional competence, the choice of relating parameters in the income approach and so on.