Page 18 - PowerPoint Presentation

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Acquisition method

• Contingent Consideration (.39 & .40)

• Business combinations are risky for acquirers

• Thus, consideration may contain contingent element

• i.e. part of total consideration based on future performance

• Dependent on uncertain future events

• E.g. profit target; share price movement; whether contract

awarded; etc.
• Fair value contingent consideration at acquisition

• Based on:

• Probability

• Time value of money

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