Acquisition Method

A business combination achieved in stages, where the acquirer held a previously existing equity interest in the acquiree before obtaining control. Under IFRS 3 and ASC 805, the acquirer must remeasure its previously held equity interest at fair value at the acquisition date and recognise any resulting gain or loss in profit or loss.

An approach to measuring goodwill in a business combination where goodwill is recognised for both the acquirer's share and the non-controlling interest's share, resulting in a higher total goodwill figure. Under ASC 805, the full goodwill method is mandatory for all business combinations.

A potential obligation arising from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the entity's control, or a present obligation where payment is not probable or the amount cannot be reliably measured. Under IFRS 3, contingent liabilities assumed in a business combination are recognised at fair value at the acquisition date even if it is not probable that an outflow of resources will be required, provided fair value can be reliably measured.

The IFRS standard that requires lessees to recognise nearly all leases on the balance sheet as a right-of-use asset and a corresponding lease liability, eliminating the previous distinction between operating and finance leases for lessees. IFRS 16 significantly impacts reported assets, liabilities, and financial ratios, and has implications for enterprise value calculations and purchase price allocations where material lease portfolios exist.

The International Financial Reporting Standard governing the accounting treatment of mergers and acquisitions. IFRS 3 requires acquirers to identify and separately recognise intangible assets at fair value as part of purchase price allocation, which often reveals significant off-balance-sheet value in areas such as customer relationships, technology, and brand.

The equity in a subsidiary not attributable to the parent company, representing the ownership stake held by minority shareholders. Under IFRS 3, the acquirer chooses for each business combination to measure the NCI either at fair value (which results in full goodwill) or at its proportionate share of the acquiree's identifiable net assets (which results in partial goodwill).

A historical method of accounting for business combinations in which the assets and liabilities of the combining entities were carried forward at their existing book values rather than being restated to fair value. Pooling of interests was prohibited by IFRS 3 (2004) and SFAS 141 (2001, now ASC 805) in favour of the acquisition method, which requires fair value measurement of all identifiable assets and liabilities.

An initial estimate recognised in a purchase price allocation when the accounting for a business combination is incomplete at the end of the reporting period in which the acquisition occurs. Under IFRS 3 and ASC 805, the acquirer has a measurement period of up to 12 months from the acquisition date to finalise the fair values of identifiable assets, liabilities, and consideration.

How to Value a Patent: 4 Methods + IP-Lending Context

Most patent valuation questions collapse into one of four canonical methods — cost, market, income/DCF, and relief from royalty — and the choice between them is governed by purpose. This guide sets out which method fits which question, the inputs each requires, the defensibility each produces, and how UK IP-backed lenders read the resulting number.

How do I value a business I want to buy?

Apply a multiple to the target's normalised earnings, then test whether the intangible assets behind those earnings — customers, technology, brand, people — justify it and will transfer to you.

How does the Asset Valuator in Opagio Intangibles work?

The Asset Valuator in Opagio Intangibles values one asset at a time. You choose a method, such as Relief from Royalty, MPEEM or the Cost Approach, enter its inputs, and it calculates a fair value estimate.