• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exams

How was your exam? Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Contingency Consideration- Applyling probability

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Contingency Consideration- Applyling probability

  • This topic has 4 replies, 3 voices, and was last updated 8 years ago by duybachhpvn.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • May 26, 2017 at 7:45 pm #388317
    satheesh90
    Member
    • Topics: 36
    • Replies: 25
    • ☆☆

    Relevant Part of a question

    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 th hat 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.

    In BPP, for the above , the contingency consideration is being calculated as (5*4.2*.2)
    Which apply the 20% of chance.. Is it correct ? I have not seen in any part of the text applying such type of calculation .

    As per my understanding the Contingency consideration shoud be 5*402= 21

    Kindly coment

    Thanks

    Satheesh

    May 30, 2017 at 11:10 am #388984
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    This question was set in June 2015 and I believe that the accounting standard (IFRS 3) has been revised since then so that this is no longer the case.

    Thanks

    May 30, 2017 at 1:48 pm #389009
    satheesh90
    Member
    • Topics: 36
    • Replies: 25
    • ☆☆

    Thnks

    May 30, 2017 at 4:09 pm #389044
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    You’re welcome.

    June 1, 2017 at 10:57 pm #389593
    duybachhpvn
    Member
    • Topics: 48
    • Replies: 34
    • ☆☆

    Hi,

    I thought that the BPP is applying the latest IFRS versions so that the 20% applied to the contingent consideration should be correct? I dont know where to check this so not sure as well… but the latest BPP revision kit applied 20% so should we apply it as well?

    Thanks

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • poojam on Objective of financial reporting – ACCA Financial Reporting (FR)
  • mm3677 on IAS 16 Accounting for a revaluation – CIMA F1 Financial Reporting
  • Anastesia123 on MA Chapter 1 Questions Accounting for Management
  • John Moffat on MA Chapter 26 Questions Variance Analysis
  • acowtant on Changes in group structure – examples – ACCA SBR lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in