How long does a purchase price allocation typically take?

Full Explanation

The PPA timeline depends on the complexity of the acquisition, the number of intangible assets to be identified and valued, and the availability of data from the target company. A typical engagement proceeds in four phases. Phase 1 — scoping and data collection (1-2 weeks): the valuation team identifies the intangible assets to be valued, requests financial data, customer data, IP documentation, and management interviews. Phase 2 — analysis and modelling (3-5 weeks): the team builds valuation models for each intangible asset, selects appropriate methods (RFR, MPEEM, cost approach), determines discount rates, and performs the WARA reconciliation. Phase 3 — draft report and review (1-2 weeks): the draft PPA report is reviewed internally and shared with the client and auditors for feedback. Phase 4 — finalisation (1-2 weeks): auditor comments are addressed, assumptions are refined, and the final report is issued. Simple acquisitions with few intangible assets may complete in 4-6 weeks, while complex multi-jurisdictional deals with significant IPR&D or contingent consideration can take 3-6 months. The IFRS 3 measurement period provides up to 12 months from the acquisition date to finalise provisional fair value estimates if information is not yet available. Companies should engage PPA specialists as early as possible in the deal process — ideally at the letter of intent stage — to ensure adequate time for a thorough analysis.

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