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Business Combination. Lecture No. 30
Financial Reporting
Hi Sir, In Illustration 13, Fair Value of the contingent consideration at the year end (31/03/20X2) is 2,20,00,000. And such change is withing the measurement period of 1 year and such contingent consideration is existent as on acquisition date. Then, shouldn't we compute Goodwill as on the closing date - 31/03/20X2 by considering the amount 2.2 crores of contingent consideration instead of 2.5 crores? And why did we not consider the same in the solution? I tried closely listening to what you told.. something about adjusting it in consolidated FS. Can you please explain the same and respond Sir.. Thanking you in anticipation Video Details ------------- Business Combination and Corporate Restructuring Business Combination and Corporate Restructuring #30. Illustration 13
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We make adjustments for new information for conditions existing as on acquisition date (like in the case of adjusting events). Here change in contingent consideration is not due to additional information for events existing on acquisition date. The change is due to other reasons. So we would remeasure liability and accordingly treat it as change in liability only and not an adjustment to goodwill
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