In the acquisition of Aubépine SA, the acquirer undertakes to pay 330,000 in 1 years if a sales target is met; the obligation is classified as a liability. Case convention: its fair value is estimated by discounting that payment, assumed certain, at the rate of 10 % (case data), and the entry is made at business combination level, against goodwill. Record the entry recognising the contingent consideration.
- Contingent payment
- 330,000
- Discount rate
- 10 %
- Time to payment
- 1