Contingent Assets and Liabilities

Why adjust them? They will appear as liabilities / assets on the consolidated statement of financial position as at the value attributed to them on date of acquisition. If there is an adjustment to be made that isn't a reassessment within the first year, then that adjustment will be reflected as a credit or charge against consolidated profit or loss If it IS a reassessment within the first year, the goodwill calculation will be affected (I suppose in that respect it's similar to an adjusting subsequent event) OK?

Thank you sir I am confused that Dip IFR June 2007 question note 1. The contingent asset at the acquisition fair value is 3000. And the question said that subsequently won the case and so the model answer said it is charged to the RE. That is decreased RE. Why reduce RE? It is reduce asset and increase asset isn't it? I assume that at the acquisition date Journal; Dr Asset Cr Pre acquisition reserve Subsequent adjustment is Journal; Dr Cash. Cr Asset Am I right sir? Regards

I imagine that what you're not telling me is that the proceeds of the subsequent win were debited to cash and credited to statement of profit or loss. Am I right?