On acquiring Étang SA, Rivage SA pays 3,000,000 in cash and undertakes to pay 1,210,000 in 2 years if an activity target is met. Case convention: the fair value of this contingent consideration is estimated by discounting the payment, assumed certain in the case, at the rate of 10 % (case data, with no probability weighting). Calculate the consideration transferred at the acquisition date.
- Cash paid
- 3,000,000
- Contingent payment
- 1,210,000
- Discount rate
- 10 %
- Time to payment
- 2