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Acquisition agreements sometimes include a provision requiring an increase in the cash price contingent upon investee's profits exceeding a specified level within a certain time

Acquisition agreements sometimes include a provision requiring an increase in the cash price contingent upon investee's profits exceeding a specified level within a certain time period. Regarding the contingent consideration, acquisition accounting requires at acquisition date:

Select one:

A. Recognition of a liability at its fair value, but with no effect on the purchase price

B. Recognition of a liability in the amount expected to be ultimately paid

C. Recognition of a liability at its fair value, resulting in an increase in goodwill

D. No disclosure of the contingent consideration because of the high degree of uncertainty

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