the client

Prestigious Italian Group, worldwide leader in the luxury good industry, within which it operates with several brands and thousands of employees. The group is involved in design, manufacturing and distribution through a worldwide network of selected dealers.

the need

The Group, following a business combination and according to the rules introduced by the International Accounting Standards (IAS/IFRS), has asked VVA an Expert Opinion in order to allocate the Purchase Price and to correctly report within the financial statements the value of the assets and liabilities identified.

details

The International Accounting Standards (IAS/IFRS) has introduced a series of evaluation and accounting criteria to be respected by the enterprises for the allocation of the purchase price among different assets and liabilities in case of business combinations ...

The International Accounting Standards (IAS/IFRS) has introduced a series of evaluation and accounting criteria to be respected by the enterprises for the allocation of the purchase price among different assets and liabilities in case of business combinations.

In particular, the purchase price allocation process started from the analysis of the key assumption of the Group’s business plan, organized by CGUs (Cash Generating Units): growth rate, sales seasonability, competitive dynamics and expected margins.

After which, VVA has proceeded to carry out the following activities:

  • Identification of the purchase price for the business combination
  • Selection of the allocation method 
  • Determination of the CGUs’ fair value
  • Identification and evaluation of the intangible assets
  • Allocation of the residual goodwill emerged from the business combination

The allocation process has asked VVA, from one side, continuous interactions with the Group’s management, in order to assess the business plan assumptions and, from the other side, a continuous assessment of the overall consistency of the allocated values among assets and liabilities.