Wednesday, November 9, 2016

General Electric filed its third-quarter earnings statement today ($29.26 billion in revenue, $1.95 in net income) and as part of its filing, gave an update on its $13.7 billion acquisition of Alstom’s power generation business last year. Specifically, GE explained how it is parceling out the cost of that acquisition among line-items on its balance sheet.

That update gives us an excellent opportunity to introduce yet another database to Calcbench customers: our trove of data on purchase price allocation, going all the way back to 2010.

For all acquisitions of any appreciable size, the acquirer reports how it will divvy up the purchase price among line-items such as goodwill, liabilities, intangible assets, and noncontrolling interests. Thanks to our database superpowers here, Calcbench can provide line-item detail on every acquisition back to 2010, on the amounts allocated to items including (but not limited to)…

  • Assets acquired: intangibles, inventories, accounts receivable, cash, goodwill, PPE (property, plant & equipment);
  • Liabilities assumed: impairments, accounts payable, long-term debt, deferred revenues, contingencies;
  • Other goodies too, such as useful life of the assets and links back to source documents.

And all our reports can be presented in crisp, easy-to-understand Excel spreadsheet format, too.

So how do Calcbench subscribers get all this purchase price allocation data? All you need to do is ask—but you do need to ask, since we can fine-tune the data quite a bit. We can provide aggregate data over time, or do sector-specific analysis, or search for specific line-items that pique your interest, and so forth.

Why This Data Is Useful

How a company allocates the purchase price of an acquisition offers a window into management’s thinking. Financial analysts can use this tool to perform better valuation analysis; identify weaknesses or strengths in the balance sheet; create more accurate projections of future impairments, costs or revenue; and more.

M&A specialists and CFOs can use our data to benchmark your own deals. Our deep pool of historical data can also test whether the original rationale for a merger was proven correct over time. It can help you allocate a the purchase price more wisely and accurately, leading to better reception of the deal among stakeholders.

Academics and other accounting researchers can also use this data. Studied in aggregate (which Calcbench can provide), purchase price allocation data can find larger trends in an industry sector or in corporate financing.

So if you’re curious, ask away.

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