[zeeshan afzal]

Thank You Sir, Appreciated.

But Sir There is also mention that selling price is before increase with the inflation rate.. why we not inflate selling price in year 1..

[zeeshan afzal]

On 1 October 20X4, Kutchen acquired 70% of the equity interests of House, a public limited company. The purchase consideration comprised 20 million shares of $1 of Kutchen at the acquisition date and 5 million shares on 31 March 20X6 if House’s net profit after taxation was at least $4 million for the year ending on that date. The market price of Kutchen’s shares on 1 October 20X4 was $2 per share and that of House was $4·20 per share. It is felt that there is a 20% chance of the profit target being met.

What is The Double Entry of this Contingent consideration?

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