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Contingent payments – consolidation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Contingent payments – consolidation

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by AvatarStephen Widberg.
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  • February 22, 2020 at 4:59 pm #562754
    Avatarashrf16
    Participant
    • Topics: 4
    • Replies: 3
    • ☆

    Isn’t the contingent consideration and contingent liabilities of the subsidiary measured at fair value when consolidating.?
    this fair value is calculated as a discounted payment weighted with probability , right?
    if so, shouldn’t we have to unwind the discount back at the year end? I haven’t seen any questions i did follow this.

    Also, if we unwind, that will be within the measurement period. does that trigger the goodwill at acquisition to be recalculated?
    .
    .
    /’

    February 23, 2020 at 6:50 pm #562843
    AvatarStephen Widberg
    Keymaster
    • Topics: 17
    • Replies: 3449
    • ☆☆☆☆☆

    1. Only unwind if there’s some kind of hint in the question – you would do it for deferred consideration, but for contingent consideration you’ll just be given an estimate.
    2. unwinding is not re-assessing FV at measurement date – so no impact on goodwill.

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