- This topic has 5 replies, 2 voices, and was last updated 5 years ago by
Katie.
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Katie
- Topics: 2
- Replies: 16
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Hi,
Not sure if I am missing something but can someone explain the double entry for contingent consideration please and also any subsequent changes?Many thanks
KatieKatie
- Topics: 2
- Replies: 16
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Sorry also for deferred consideration as well?
Katie
- Topics: 2
- Replies: 16
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sorry yes I didn’t make that clear.
veronikapegler
- Topics: 0
- Replies: 22
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Contingent consideration is when we acquire business but the actual amount cannot be known 100% as will depend on difference factors (depends on each situation). In goodwill calculation contingent consideration has to be included at the best estimate amount.
Katie
- Topics: 2
- Replies: 16
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Hi,
Thank you for your replies. What would be the credit entries for the contingent and deferred consideration in the SFP?Katie
- Topics: 2
- Replies: 16
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Thank you for your help. I presume therefore that for deferred consideration it’s the present value of the fair value that’s entered into the goodwill calculation and the equivalent value entered as a liability. Then at year end it is unwound and the interest is charged to the p&l?
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