IFRS 3 • Educational benchmarking tool
Purchase Price Allocation
Explore an indicative allocation to identifiable intangible assets, deferred tax and goodwill, together with common methods by industry. This is a general educational resource—not a client-delivery tool.
Transaction inputs
Likely assets for this industry
Indicative allocation
Common valuation methodologies
| Asset | Common method |
|---|---|
| Customer relationships | Multi-period excess earnings method (MEEM); distributor method where another asset is primary |
| Brand / trade name | Relief-from-royalty (RFR) |
| Developed technology / software | RFR, MEEM or replacement cost |
| Contracts, backlog, non-compete | With-and-without / lost-income method; MEEM for certain contracts |
| Licences, concessions, operating rights | Greenfield or with-and-without method |
| In-process R&D | Probability-weighted income approach |
| Assembled workforce | Replacement cost as a contributory asset; generally subsumed within goodwill |
How the calculation works
Identifiable intangibles equal purchase consideration multiplied by the selected industry benchmark, adjusted by any percentage-point input. The deferred tax liability reflects the difference between estimated book value and entered tax basis. Goodwill is the residual: purchase consideration less net tangible assets and identifiable intangibles, plus the deferred tax liability.
Benchmarking is only an initial educational reasonableness tool. Transaction-specific professional work separately considers recognition, forecasts, market evidence, useful lives and return reconciliation under the applicable standards.
Sources
- KNAV 2024 Purchase Price Allocation Study — industry percentages.
- Stout Purchase Price Allocation Study, Q4 2024 — benchmarking and methodology context.
- IFRS 3 illustrative examples — recognition examples.