Purchase Allocations

BV ASC 805 (formerly SFAS 141) and BV ASC 350 (formerly SFAS 142) govern the valuation of intangible assets in connection with business combinations. When companies merge, they have to allocate the value of the assets of the new entity, including identifiable intangible assets, such as goodwill. Because the value of these assets increases and decreases over time, impairment testing is needed to identify any significant changes in value.