Sir in contingent consideration, consideration will come from different sources and they are based on different targets. But the management has multiplied the total of the amount of contingent consideration with a probability of 50%.
So what will be the correct treatment. Will the treatment be to obtain a breakup of contingent consideration and assess the probability of each consideration coming from each source separately. Or the management treatment is correct.
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Contingent consideration
5y ago#1Not quite sure what you mean. You are likely to be given a fair value in the exam question. Please give more detail if it would help you.
I'm saying that in contingent consideration for example we are receiving payment based on four targets and we will assign a probability figure for those targets.
So can we assign one probability figure on all four targets or we will assign a saperate probability figure for each target. Bcoz through probability we will calculate the value for contingent figure.
I’m saying that in contingent consideration for example we are receiving payment from four sources and each source has a target and we will assign a probability figure for those sources.
So can we assign one probability figure on all four sources or we will assign a saperate probability figure for each source. Bcoz through probability we will calculate the value for contingent figure.
Note: The above question was incomplete this is the complete question.
5y ago#4Contingent consideration is payable from buyer to seller. I don't fully understand what you mean by 4 sources. However, I would say that probability would be considered for each 'source' independently.
Thank you sir :)
5y ago#6My pleasure.
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