I have read in Kaplan that purchase consideration, includes:
1. Cash Consideration
2. Shares Exchange/ Issues
3. Deferred Consideration
4. Asset Consideration
5. Share Scheme Issuance
Kindly, explain the treatment of Share Scheme Issuance part.
Thanks
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Purchase Consideration in Goodwill
3y ago#1The term is unclear if that's what they have written. My best guess is:
If Company A buys Company B, part of the consideration may be providing a share based pay scheme to the employees of Company B (to replace another scheme).
I've copied the below from iasplus.com: (if you are interested).
"Contingent payments to employees and shareholders
...
Where share-based payment arrangements of the acquiree exist and are replaced, the value of such awards must be apportioned between pre-combination and post-combination service and accounted for accordingly. [IFRS 3.B56-B62B] "
As always.............keep it simple in this exam! :)
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