# Purchase Price Allocation

*Corporate Finance & M&A — Finicade finance glossary*

Purchase price allocation assigns what you paid across the acquired assets and liabilities at fair value, with the unexplained remainder recorded as goodwill. The split matters for years afterwards: identified intangibles are amortised against future profit while goodwill is not, so allocation choices shape reported earnings long after the deal closes.

**Also known as:** PPA, allocation of purchase price

**Related terms:** [Goodwill](https://finicade.com/glossary/goodwill), [Amortization of Intangibles](https://finicade.com/glossary/amortization-of-intangibles), [Impairment](https://finicade.com/glossary/impairment), [Mergers and Acquisitions (M&A)](https://finicade.com/glossary/mergers-and-acquisitions), [Fair Value](https://finicade.com/glossary/fair-value)

Source: https://finicade.com/glossary/purchase-price-allocation