Appraisal Economics Inc. has conducted a purchase price allocation for a manufacturer of highly engineered building products. A private equity firm and a pension fund acquired the building materials manufacturer for total consideration in excess of $1 billion. The company operates several highly automated facilities across North America that produce a variety of synthetic building materials designed to replace wood, metal, and other traditional materials for both commercial and residential use. The company has some of the leading brands of synthetic decking, siding, railing, and pavers. Appraisal Economics allocated the purchase price among the financial, tangible, and intangible assets of the company. The assets included real property in two countries, machinery and equipment, leasehold interests, proprietary technology, trademarks, customer relationships, and goodwill. Once goodwill is placed on the balance sheet due to acquisition, it is tested at least annually for impairment.

Please click for more information about purchase price allocations and goodwill impairment testing.