Inventory Appraisal for Mergers & Acquisitions

Inventory Appraisals for Mergers and Acquisitions

Accurate inventory valuation is one of the most consequential and frequently contested elements of any M&A transaction. Under ASC 805, business combinations require fair value measurement of all acquired assets, including inventory, as of the acquisition date. For tax purposes, purchase price allocations under IRC Section 1060 must reflect fair market value across asset classes, with both buyer and seller filing IRS Form 8594 using identical figures. Our inventory appraisal services address the full scope of these requirements, from raw materials and work-in-process to finished goods, applying GAAP-consistent methodology that holds up to auditor and IRS scrutiny.

AppraiseItNow delivers inventory appraisals online and onsite throughout the United States, supporting deal teams, CFOs, and transaction counsel at every stage of the process. Whether you need a pre-close valuation to anchor working capital negotiations or a post-close opening balance sheet figure, our M&A appraisal services are structured to meet deal timelines without sacrificing rigor.

Inventory Types We Appraise in M&A Transactions

AppraiseItNow appraises a wide range of inventory categories that commonly appear in acquisition due diligence and purchase price allocation work.

• Raw materials, including bulk commodities, components, and unprocessed inputs held at manufacturing or distribution facilities
• Work-in-process inventory at various stages of completion, requiring cost-layer analysis from receipt through production
• Finished goods ready for sale, valued against current market pricing and net realizable value
• Slow-moving, excess, and obsolete stock requiring reserve analysis and SKU-level aging review
• Consigned inventory, whether held by the seller on behalf of others or held by third parties on behalf of the seller
• Spare parts and maintenance, repair, and operations (MRO) inventory tied to production equipment
• Retail merchandise inventory across single or multi-location businesses, including seasonal and clearance stock
• Wholesale and distributor inventory with layered cost structures and varying turnover rates
• Perishable or shelf-life-limited inventory requiring condition assessment and remaining usability analysis
• Industry-specific inventory such as pharmaceutical stock, food and beverage products, or specialty chemicals with regulatory considerations

How AppraiseItNow Approaches M&A Inventory Appraisals

Our appraisers review inventory listings by location, including item descriptions, SKU numbers, acquisition dates, unit counts, and recorded costs, and reconcile these against physical count observations and usage reports.

• Valuation methodology follows ASC 330 and ASC 805 requirements, with analysis of cost basis from receipt to current condition, turnover rates, and reserve adequacy for slow-moving or obsolete items. Where pre-M&A accounting practices deviate from GAAP, such as expensed inbound freight or inconsistent overhead capitalization, our appraisers document the adjustments required to arrive at a compliant fair value conclusion.
• Reports are structured to support both financial reporting and tax allocation purposes, with reconciliation between fair value under ASC 805 and fair market value for IRS Form 8594 filings. This dual-purpose documentation reduces the risk of discrepancies between buyer and seller filings, which are a known audit trigger.
• AppraiseItNow appraisers hold credentials through recognized professional organizations including ASA, ISA, AAA, and others, and are experienced working alongside quality of earnings analysts, transaction attorneys, and Big Four audit teams on time-sensitive deal schedules.
• Appraisals are available both onsite, with physical count observation and facility walkthroughs, and remotely using digital inventory records, photographs, and management interviews, depending on deal structure and timeline requirements.