Module V· Identifiable Intangibles in PPAIntermediate
Question

What is the multi-period excess earnings method (MEEM), and when do you use it?

Answer

MEEM values an intangible asset by isolating the cash flows attributable to it after charging contributory assets. It is commonly used for customer relationships and sometimes technology. The model forecasts revenue, margins, attrition, taxes, contributory asset charges, and discounts the resulting excess earnings to present value.