purchase price

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The value of a thing with real or perceived worth. Price represents the amount of value the market has assigned, fairly or unfairly, to a good or service. Normally, prices are expressed in terms of money, but practices such as countertrade and PIK securities indicate that prices may be expressed in goods: "four chickens for two sheep." Price is a necessary component of trade.

Prices tend to be regulated by the law of supply and demand; that is, a price of a good or service increases with smaller supply and/or greater demand. A corollary to this is the idea that commoditization drives prices down because it increases supply (sometimes vastly) while leaving demand the same. Prices likewise rise when the value of money declines. Governments can and have controlled the prices of certain goods and services by subsidy or decree. This is usually an anti-inflationary measure and tends to distort, rather than eliminate, the law of supply and demand. It is thus not generally sustainable as a mechanism for controlling price.

purchase price

The contractually agreed upon price for a property, before credits, adjustments, or concessions.

References in periodicals archive ?
In these cases, the basis for determining the purchase price is often 20 percent of the revenues from the purchased clients during each of the succeeding five years.
Perform the calculation of the post-closing purchase price adjustment in accordance with the provision.
The funding of a redemption purchase price may give rise to an accumulated earnings issue, since the Internal Revenue Service may question the accumulation of funds to provide for the redemption.
197 intangible and can be applied in any situation in which the seller is willing to take the purchase price in payments over time.
Commissioner, the taxpayer allocated the purchase price to the cost of the right to service mortgage loans, but the Tax Court allocated some of the purchase price to nondeductible goodwill and going concern value.
Some tax practitioners believe that a purchase price adjustment exists for all acquisition debt, not just seller-financed debt.
To determine both the buyer's basis and the seller's gain or loss, the purchase price is to be allocated in the same manner as stock purchases treated as asset purchases under IRC section 338(b)(5) and temporary regulation 1.
An acquiring corporation purchased assets for a base purchase price plus a contract to issue a promissory note to the seller, contingent on the purchased business's performance over a defined term.
The manner in which the purchase price of a trade or business is allocated between amortizable (e.