EAC was awarded a Purchase Price Allocation contract for the acquisition of a national diagnostic imaging service network. The allocation of the purchase price for the acquired business combinations, under ASC 805, included working capital, equipment, and intangible assets including proprietary software, domain names, non-compete agreements, customer relationships, and trademarks.
‣ Industry: Healthcare
‣ Standard of Value: Fair Value, ASC 820
ASC 805 requires that a business combination be accounted for by applying what is referred to as the acquisition method. This topic addresses specific aspects of the acquisition method, including recognition and measurement of identifiable assets and goodwill.
ASC 820 (Fair Value Measurement and Disclosure) defines Fair Value, sets out a framework for measuring fair value and requires certain disclosures about fair value measurements. This topic defines Fair Value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”.