Contingent consideration will be classified as a liability when: A

Accounting Jun 07, 2021

Contingent consideration will be classified as a liability when:
A. it will be paid in the form of additional equity. B. it will be paid in the form of cash or another asset. C. the form of payment will be determined at a future dat D. the acquirer decides the appropriate time to make a p

Expert Solution

Answer

B .

Explanation

Contingent consideration is the amount of consideration to be paid by an acquirer to the acquiree in a business combination. It should be valued at the fair value of the consideration on the date of acquistion. Contingent consideration will be classified as a liability when "it will be paid in the form of cash or another asset".

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote