US chemical conglomerate - intangible assets valuation

PwC's client, a US chemical conglomerate, had, through its UK subsidiary, acquired a diverse chemicals and engineering group listed in the UK. In accordance with US accounting standards the company was required to allocate the total purchase price to all of the assets and liabilities acquired, including intangible assets. This process is usually referred to as Purchase Price Allocation (PPA).

The PricewaterhouseCoopers valuation team assisted the client in rigorously identifying the acquired intangible assets, as required by US regulations, and to value these assets on a 'fair value' basis. Our experience of PPAs and our knowledge of relevant accounting standards allowed us to identify assets that otherwise may have been overlooked, and also to exclude assets that did not meet the criteria for recognition.

The valuation of intangible assets utilises a number of complex methodologies that often must be applied on a judgemental rather than prescriptive manner. A team with both an in-depth knowledge of intangible asset valuation and relevant industry experience meant that only the most appropriate methodologies were applied. The PwC team worked closely with management throughout the process, ensuring that the final data reflected management's view of the value drivers of the acquired business and that it met the reporting requirements of the US Securities and Exchange Commission.