Intangible property is one of the commonly forgotten and largely misunderstood items of property or assets that make up a business sale. The reason for this is that as a general rule, it is considered to be an ancillary component of a wider business package. We will work through the variety of business assets that make up the category of intangible property.
With the introduction of the purchase price allocation rules, from the perspective of a vendor allocating a value to these items, these rules may become important. Equally from a purchaser’s perspective, challenging that value may also become an important factor in a negotiation.
There are two key elements to the importance of intangible property in this equation. The first is that intangible property might be a second class of property, meaning the rules must be applied. Secondly, the allocation of that value becomes important when determining value between the various asset components. There is often an emphasis on placing value on fixed-assets, for example, for depreciation recovery. A similar consideration will now need to be given to intangible property which, if depreciated or amortised, will have similar outcomes or considerations.
This course aims to give you the knowledge and understanding of intangible property and its various components and how the purchase price allocation rules will make a difference when completing a business negotiation and sale. This will arm you with the ability to get the best outcome for your client when you are assisting in a business sale package and a breakdown of the components.
Upon satisfactory completion of this activity you will be able to:
- Understand and apply the purchase price allocation rules
- Identify the assets that relate to apportionment allocation
- Consider the relevant tax rules to determine the treatment of different types of intangible property.
Total CPD Hours: 1.25 (1 hour + 15 min. Q&A)
- Accountants and lawyers acting for people that buy and sell businesses that include intangible property
- Anyone advising on intangible property transfers and needing to understand the taxation treatment of these.
Alex Davidson, Partner, Findex/Crowe
Alex is a Partner in the Nelson Marlborough Tax Division of Findex/Crowe. He has over 20 years’ experience in accounting, commercial and teaching roles, with the last 15 years specialising in taxation. Alex has
broad experience advising a diverse range of clients in all areas of taxation. He’s particularly interested in assisting innovative start-up businesses, including helping them move offshore. Alex is a regular presenter
on tax issues, including for TEO Training.
7 December 2021
10:00 am - 11:15 am