The usefulness of these approaches is diminished by the requirement to limit the term of the reacquired right to the remaining contractual term. Purchase price allocations are one of the niche practice areas for valuators. The market-based data from which the assets value is derived under the cost approach is assumed to implicitly include the potential tax benefits resulting from obtaining a new tax basis. This reconciliation is often referred to as a weighted average return analysis (WARA). WACC Formula, Definition and Uses - Guide to Cost of Capital In pull marketing, the premise is to pull customers to the products (e.g., a customer goes to a department store to buy luxury brand purses). In certain circumstances, an acquirer will be able to measure the acquisition-date fair value of the NCI and PHEI based on active market prices for the remaining equity shares not held by the acquirer, which are publicly traded. Direct and incremental costs may or may not include certain overhead items, but should include costs incurred by market participants to service the remaining performance obligation related to the deferred revenue obligation. Conceptually, when the PFI reflects only market participant synergies and the consideration transferred is adjusted for any entity-specific synergies that were paid for, the IRR should be consistent with the industry-weighted average cost of capital (WACC), which is the industry-weighted average rate of return on debt and equity as required by market participants (i.e., investors). One key factor a reporting entity should consider is how the inventory would be marketed by a market participant to its customers. Increased cost of raw materials, labor, or utilities that cannot be offset by an increase in price due to competition or limited demand, as well as a change in environmental or other regulations, inflation, or high interest rates, may suggest economic obsolescence.