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Hi Mike,
For contingent consideration, why do we deduct the amount agreed on at acquisition of $1.8m from Goodwill rather than the $1.5m amount on which it was finally estimated?
Concerning pup calculation, why is it calculated based on $9m rather than $5.4?
Because, at date of acquisition $1.8 was the best estimate. The goodwill is calculated as at a moment in time. Subsequent events that cause those figures to change belong in the subsequent period.
However, there is the alternative matter that is the first year review. If, within the first twelve months following acquisition, there is a re-assessment of the values as at acquisition date, then they WILL be used to adjust the working W2 values.
This is NOT the same as the contingency where that value changed as a result of subsequent events.
The $1.5 million still in inventory is 1.5 of the 9 million invoiced back to Polestar
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