What it is
An acquisition changes the balance sheet in one day, and the accounting rests on a handful of judgments: whether the set is a business, who the acquirer is, what the consideration includes, and the fair value of everything acquired. The memo records each judgment with its support.
The template starts with the business screen, then the acquirer and date, consideration, the fair value table, goodwill or bargain purchase, the entries, the measurement period and the disclosure and pro forma inputs.
When to use it
- Before the first close that follows an acquisition.
- When the deal includes an earn-out, equity consideration or a previously held interest.
- To support the valuation specialist’s report and the auditor’s testing.
What’s inside
- Business versus asset acquisition screen
- Acquirer identification and acquisition date
- Consideration table with earn-out, equity and separate transactions
- Fair value table of identifiable assets and liabilities with lives
- Goodwill computation, entries, provisional items and pro forma disclosure inputs
Standard cited
This template follows ASC 805. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Are acquisition costs part of the purchase price?
No. In a business combination the acquirer expenses acquisition-related costs as incurred. In an asset acquisition, the costs are capitalized into the asset.
How long is the measurement period?
Up to one year from the acquisition date. Provisional amounts are adjusted for facts that existed at that date, and the memo lists the items still provisional at each report date.
How is contingent consideration measured?
At fair value on the acquisition date as part of consideration. If it is a liability, it is remeasured to fair value every period with the change in earnings.
Related templates
- Purchase Price Allocation Workbook (ASC 805)
- Disclosure Checklist: Business Combinations (ASC 805)
- ASC 350 Goodwill Impairment Memo
- Pro Forma Financial Statements Template
Last updated 11/05/2026. All free templates.