ABC Corporation acquires all of the assets and liabilities of XYZ Company in a merger. If ABC offers the former shareholders of XYZ an earnings contingency, what is the likely result of having this contingency, on ABCs balance sheet?

Select one:

a. ABC will report more goodwill.

b. ABC will revalue XYZs previously reported assets at higher amounts.

c. ABC will revalue XYZs previously reported liabilities at higher amounts.

d. There is no effect on how ABC reports the assets and liabilities acquired from XYZ.