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Contingent consideration

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › Contingent consideration

  • This topic has 5 replies, 2 voices, and was last updated 8 years ago by Katie.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • November 8, 2016 at 2:41 pm #348064
    Katie
    Member
    • Topics: 2
    • Replies: 16
    • ☆

    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
    Katie

    November 8, 2016 at 2:45 pm #348065
    Katie
    Member
    • Topics: 2
    • Replies: 16
    • ☆

    Sorry also for deferred consideration as well?

    November 8, 2016 at 3:15 pm #348068
    Katie
    Member
    • Topics: 2
    • Replies: 16
    • ☆

    sorry yes I didn’t make that clear.

    November 8, 2016 at 3:22 pm #348072
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 22
    • ☆

    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.

    November 8, 2016 at 3:39 pm #348076
    Katie
    Member
    • Topics: 2
    • Replies: 16
    • ☆

    Hi,
    Thank you for your replies. What would be the credit entries for the contingent and deferred consideration in the SFP?

    November 8, 2016 at 4:27 pm #348095
    Katie
    Member
    • Topics: 2
    • Replies: 16
    • ☆

    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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