recording deferred consideration on B/S

Lliming10y ago

Dear sir, when parent has purchased its subsidiary with deferred consideration, what would be the book value of this deferred consideration on the consolidated balance sheet? and does it amortize over time if this deferred consideration will be paid off over a couple of years rather than simply one year into the acquisition? thank you!! regards Lm

MikeLittleTutor10y ago#1

It's a liability on the consolidated statement of financial position at its present value as at date of acquisition and yes, it will increase over time as the discounted present value increases the closer we get to payment date

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