Which oft he following statements best describes the current authoritative position with regard to the accounting for

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Which oft he following statements best describes the current authoritative position with regard to the accounting for contingent consideration?

a. If contingent consideration depends on both future earnings and future security prices, an additional cost of the acquired company should be recorded only for the portion of consideration dependent on future earnings.

b. The measurement period for adjusting provisional amounts always ends at the year-end of the period in which the acquisition occurred.

c. A contingency based on security prices has no effect on the determination of cost to the acquiring company.

d. The purpose of the measurement period is to provide a reasonable time to obtain the information necessary to identify and measure the fair value of the acquiree’s assets and liabilities, as well as the fair value of the consideration transferred.

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Advanced Accounting

ISBN: 12

5th Edition

Authors: Debra C Jeter, Paul K Chaney

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