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Hi Mike,
I have watched most of the lectures of the Group Accounts.
Your lectures are very very informative, clear and I have started to follow the same format as shown in the videos. Thanks so much!!!Contingent consideration is when the cost of investment is paid partly at the DOA and partly is paid if subsidiary made xxxxx amount of profit by a future date.
We still include contingent consideration of both the payment at the year end. Is that correct??
How do we treat contingent consideration in form of equity, debt instrument or cash.Please can you also explain what is acquisition date fair value of contingent consideration.
I am really struggling to understand this topic.
Thanks.In any exam question involving contingent consideration the examiner will always provide you with sufficient information to be able to arrive at a value
From memory he invariably says “Ignore the time value of money” when contingent consideration is involved
“How do we treat contingent consideration in form of equity, debt instrument or cash” – You will be given values for each element. As for double entry ….
Dr Cost of Investment
Cr Contingent ConsiderationHope that helps
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