Glossary

Purchase Price Allocation

A purchase price allocation assigns a deal's purchase price to the assets and liabilities acquired.

A purchase price allocation assigns a deal's purchase price to the assets and liabilities acquired. The buyer and the seller use that assignment to set tax basis. It follows the asset classes on Form 8594. The choices made at closing follow the company in depreciation, amortization, and a later sale.

Related note

What a purchase price allocation decides

A purchase price allocation assigns the price paid for a business across its assets. It sets the tax basis, the amortization, and the goodwill that follow the deal.

Related terms

Form 8594

Form 8594 is the IRS form a buyer and a seller file to report the purchase price allocation in an asset sale.

EBITDA Bridge

An EBITDA bridge is a financial reconciliation that explains the change in EBITDA between two periods, typically from pre-acquisition to post-acquisition, or from one fiscal year to the next.

Related practice

Tax Compliance

Tax strategy and compliance for companies moving fast.

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