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Business combinations
How an acquisition is recorded: the purchase-price allocation, identifiable assets and goodwill, with Altria's NJOY deal and Salesforce's Informatica acquisition.
The short answer
When a company buys a business, it does not simply record the check it wrote as an asset called 'the acquisition.' It allocates the purchase price to the identifiable assets it acquired and the liabilities it assumed, at fair value on the acquisition date, and records any leftover amount as goodwill. The 10-K usually includes a purchase-price allocation table and, for a large deal, a short description in the MD&A.
The purchase-price allocation
Altria's 10-K for 2025 says it accounted for the NJOY Transaction as a business combination and presents "The final purchase price allocation to the assets acquired and liabilities assumed." The table assigns the consideration to cash, receivables, inventory, property and equipment, identifiable intangible assets such as developed technology and trademarks, and assumed liabilities including deferred taxes. The leftover amount is goodwill. Altria says the excess of the total consideration over the identifiable net assets primarily reflected the value of future growth opportunities in the e-vapor category.
That leftover is the usual meaning of goodwill in an acquisition: the residual after every identifiable asset and liability has been assigned a fair value. Identifiable intangibles, such as trademarks or developed technology, are listed separately and are often amortized. Goodwill is tested for impairment rather than amortized.
Source: Altria 10-K for fiscal 2025, filed Feb 25, 2026
A software deal: Salesforce and Informatica
Salesforce's 10-K for fiscal 2026 states that in November 2025 it completed its acquisition of Informatica for approximately $9.6 billion, and that the acquisition closed in the fourth quarter of fiscal 2026. In its critical-accounting discussion it says accounting for business combinations requires significant estimates and assumptions at the acquisition date for the tangible and intangible assets acquired and the liabilities assumed. The financial statements also present a short period of Informatica's post-acquisition revenue and a pro forma view of the combined companies as if the deal had closed at the start of the prior fiscal year. Those pro forma figures are illustrations, not the historical results of either company standing alone.
Source: Salesforce 10-K for fiscal 2026, filed Mar 2, 2026
What to read next
- The allocation table shows how much of the price went to cash, tangible assets, identifiable intangibles and goodwill.
- The closing date tells you how many months of the acquired business are in this year's revenue.
- Deal costs such as banker and legal fees are usually expensed, not added to the purchase price.
- Merger filings (the 8-K, and an S-4 if shareholders voted) are the documents from when the deal was announced and closed.
Common questions
What is a business combination?
The accounting name for an acquisition in which a company obtains control of a business. The buyer records the identifiable assets and liabilities at fair value and any leftover purchase price as goodwill.
What is a purchase-price allocation?
The table that assigns the consideration paid to each class of asset acquired and liability assumed. Altria's NJOY note is an example.
Why is there leftover goodwill?
Because the price often exceeds the fair value of the identifiable net assets. The buyer may be paying for assembled staff, future growth or expected savings that are not recognized as separate assets.
Do the acquired company's sales count from the first of the year?
No. Revenue is included only from the closing date, unless the 10-K also presents a separate pro forma view that recasts earlier periods as if the deal had already closed.
Where do I find this in the 10-K?
In an acquisitions or business-combinations note, and often in the MD&A for the year the deal closed. The announcement itself is usually an 8-K.
Disclosures
- Editor holdings
- The editor holds no position in any company named on this page. As of Nov 11, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Nov 10, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
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