Dec 2010 Question 3 (c) Clooney

In answer to your first Q - yes. At the time the due diligence report was prepared it would have included information about the value of the assets [to be] purchased and the consideration [to be] paid. Now, post-acquisition, the report includes information about the value of the assets [that were] purchased and the consideration [that was] paid. Obviously how much information will be found in a DD report will depend on the specific assignment and, as you say will consider the facts, but the [proposed] consideration could be relevant to the report (e.g. if the target company needs cash the purchase consideration will need to include cash rather than a share-for-share exchange or perhaps some of the purchase consideration should be deferred to take account of uncertainty about the value of certain assets). The examiner's answer is showing that reference to legal agreement to confirm date control passes is sufficient to earn 1 mark (because this date is fundamental to consolidation). To reference consideration paid in this point, as you suggest, rather than in the due diligence report would be fine.