Valuation of Intangible Assets
OLZ values intangible assets as part of purchase price allocations (PPA), impairment tests or specific valuation mandates.
According to International Financial Reporting Standard 3 (IFRS 3), a purchaser is obligated to carry out a purchase price allocation. This involves determining the economic market value of tangible and intangible assets as well as liabilities and comparing the resulting adjusted own capital (taking into account latent taxes) with the purchase price. The aim of IFRS 2 is to obtain a remaining positive capital offset (goodwill) that is as low as possible.
The valuation of intangibles as part of a PPA should ideally link the valuation on which the acquisition depends with the relevant value drivers. IFRS require that annual impairment tests be carried out for goodwill, which is divided into cash-generating units, and for intangible assets of an indeterminate duration.
OLZ has a broad expertise in valuation models for intangible assets as well as in modeling and carrying out impairment tests.
