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  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • June 2, 2016 at 2:15 pm #318880
    vmchishimba
    Participant
    • Topics: 4
    • Replies: 13
    • ☆

    on 1/04/2013 P acquired 75 % the 12million 50 cents equity shares of S . S had been experiencing difficult trading conditions and making significant losses . It’s retained earnings at the acquisition date were $14.3 million . in allowing for S’s difficulties , P made an immediate cash paymentof only $1.50 per share . In addition P will pay a further amount in cash on 30/09/2014 if S returns to profitability by that date. The value of this contingent consideration at the date of acquisition was estimted to be $ 1.8, but at 30/09/2013 million. in the light of continuing losses , it’s value was estimated at only $1.5 million . The contingent consideration has not been recorded by P. Overall , the directors of P expect the acquisition to be a bargain purchase leading to negative goodwill.
    At the date of acquisition shares in S had a listed market price of $1.20 each.

    calculate good will .

    my question;
    how do you find contingent consideration

    June 2, 2016 at 5:19 pm #318915
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22698
    • ☆☆☆☆☆

    “how do you find contingent consideration”

    You look at the sixth line above where it says:

    “contingent consideration at the date of acquisition was estimted to be $ 1.8”

    Is there a problem with including $1.8 million in your calculations in respect of contingent consideration?

    June 3, 2016 at 7:16 am #319016
    vmchishimba
    Participant
    • Topics: 4
    • Replies: 13
    • ☆

    Thanks . I was just tied may be.

    June 3, 2016 at 7:27 am #319019
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22698
    • ☆☆☆☆☆

    “tied” ?

    Maybe “tired”

    Get plenty of sleep before the exam next week! You need to be on top form – not tired or exhausted

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