Ind AS 103 purchase price allocation: identifying the intangibles
Customer relationships, technology, brands and order backlog — what auditors expect to see recognised after an acquisition.
Ragulika IP Valuation Team · 4 August 2026 · 1 min read
After a business combination, Ind AS 103 requires the acquirer to recognise identifiable intangible assets separately from goodwill, measured at fair value. Ind AS 38 sets out when an intangible is identifiable: it is either separable or arises from contractual or legal rights.
Commonly recognised intangibles
- Technology — patents, software and unpatented know-how
- Marketing-related — trademarks, brands, domain names, non-compete agreements
- Customer-related — customer relationships, contracts and order backlog
- Contract-based — licences, franchises and favourable supply contracts
Typical methods
The primary income-generating intangible is often valued with the multi-period excess earnings method; brands and technology with relief-from-royalty; and non-competes with the with-and-without method. Contributory asset charges and the tax amortisation benefit must be consistent across the model.
Reconciling to the deal
A credible PPA reconciles the weighted average return on assets with the internal rate of return implied by the purchase price and the WACC. Large unexplained gaps are a red flag for auditors.
This article is general information, not valuation, legal or tax advice.