Treatment of Contigent and Deffered consideration, Loan notes in SOPL & SOFP, and calculation of cost of investment for calculating goodwill on acquistion??
I am getting difficulty in accounting for contigent and deffered consideration in statement of financial position and statement of profit /loss. Can you help me?
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Cost of investment on acquistion for calculating goodwill
13y ago#1Both should be included within the calculation of the cost of goodwill for SoFP but the deferred consideration needs to be discounted to present value.
For SoI, the deferred consideration discount needs to be unwound to arrive at the finance charge related to that deferral.
OK?
And what amount of deferred liability to be shown in balance sheet? Does it include the relative year finance charge? I mean to say that does deferred liability increases every year by finance charge on it?
13y ago#3It certainly does - it increases each year by the amount of that year's unrolled discount
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