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Hi Sir, I have one query about the question 1 of specimen paper from Sept 18- Kutchen Group. May I know why for this question the contingent consideration no need to discount back to present value? and In what case, we need to discount the contingent consideration into present value?
Thank you sir.
If the consideration is deferred you will have to discount back to present value
However if the consideration is contingent you will be given the fair value of the consideration which will not need to be adjusted
In this case, the contingent consideration is further 5m shares of Parent Co, so since shares is based on fair value at the acquisition date so there is no need to be adjusted.
May I knw what if the contingent consideration is cash consideration? do we need to discount it to present value? or actually, no matter what form of the contingent consideration, we also no need to adjust?
Tq
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