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The benefits of a pre-deal purchase price allocation for acquisition decisions: an exploratory analysis

  • This paper analyzes the benefits of a pre-deal purchasing price allocation (pre-deal PPA), which acquirers have come to integrate into an acquisition process to examine the effects of a potential acquisition on the acquirer’s financial statements. The authors take a management perspective and iestigate if the tool improves the comprehensiveness and quality of acquisition decisions. Based on an exploratory analysis using the results of semi-structured interviews with 24 accounting professionals from 19 Germany-based companies, the authors conduct a qualitative content analysis to identify the method’s benefits in the context of friendly acquisitions. The results suggest that, subject to cost-benefit considerations, a pre-deal PPA increases decision quality and leads to more comprehensive acquisition decisions. Furthermore, the paper proposes several best practice approaches to improve the implementation of a pre-deal PPA.

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Document Type:Article
Author:Henning ZülchORCiD, Dominic DetzenORCiD, Martin Wünsch, Torsten WulfORCiD, Philip Meißner
Chairs and Professorships:Chair of Accounting and Auditing
Year of Completion:2013
In: Problems and Perspectives in Management, 11 (2013) 1, 59-68