Provisional Amount

The period following a business combination during which the acquirer may adjust the provisional amounts recognised at the acquisition date as new information is obtained about facts and circumstances that existed at that date. Under IFRS 3 and ASC 805, the measurement period cannot exceed 12 months from the acquisition date.

A business combination in which the fair value of the identifiable net assets acquired exceeds the consideration transferred, resulting in a gain rather than goodwill. Under IFRS 3 and ASC 805, the acquirer must reassess whether all assets and liabilities have been correctly identified and measured before recognising a bargain purchase gain in profit or loss.

The process of allocating the total price paid in a business combination to identifiable tangible assets, intangible assets, and liabilities, with any residual assigned to goodwill. PPA is required under IFRS 3 and ASC 805 and is the primary mechanism through which acquired intangible assets are recognised on the balance sheet.

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.

The US GAAP standard on lease accounting that, like IFRS 16, requires lessees to recognise right-of-use assets and lease liabilities for most leases. ASC 842 retains a distinction between operating leases (straight-line expense) and finance leases (front-loaded expense) on the income statement, unlike IFRS 16 which treats all leases similarly.

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 total consideration transferred by the acquirer to obtain control of a target business in a merger or acquisition. The purchase price encompasses cash, shares, assumed liabilities, and contingent consideration, and forms the basis for purchase price allocation under IFRS 3 and ASC 805, where it is allocated across identified tangible assets, intangible assets, and goodwill.

A budgeting method in which all expenditures must be justified from scratch each period, rather than being based on prior-period budgets with incremental adjustments. ZBB forces rigorous scrutiny of intangible investment decisions — including R&D, marketing, and training — and can improve capital allocation discipline when applied alongside productivity measurement.

Patent Valuation: Methods, a Worked Example and What a Patent Is Worth

Patent valuation in practice: what drives how much a patent is worth, the four methods valuers use under IVS 210, and a relief-from-royalty calculation that reconciles line by line over a UK patent's remaining legal life, with no terminal value after expiry.

What is a vendor loan note?

A vendor loan note is an arrangement where the seller lends part of the purchase price back to the buyer, repaid over time with interest. It bridges the gap between the price a seller wants and the cash a buyer can raise.

How much money do I need to buy a business?

Often much less than the headline price. Acquisitions are usually funded with a mix of your own equity, bank or asset-based debt, and vendor finance, so the cash you need upfront can be a fraction of the total.

What is normalised EBITDA and why do buyers adjust it?

Normalised EBITDA restates reported earnings to remove one-off items and owner-specific costs, showing the sustainable earning power a buyer would inherit. Buyers adjust it because the multiple is applied to this figure, so it sets the price.