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Homework answers / question archive / Contingent consideration will be classified as a liability when: A
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
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".
