IDEAS home Printed from https://ideas.repec.org/a/cmj/lawsor/y2017i2p53-56.html
   My bibliography  Save this article

Accounting For Contingent Considerations In Business Combinations

Author

Listed:
  • Gurgen KALASHYAN

    (Ivane Javakhishvili Tbilisi State University, Tbilisi, Georgia)

Abstract

According to IFRS 3 Business Combinations contingent considerations must be included in the total consideration given for the acquired entity along with cash, other assets, ordinary or preference equity instruments, options, warrants. The contingent consideration is the determined amount which acquiring entity has to pay to acquired entity provided, that certain conditions will be fulfilled in the future. In case the provisions are not satisfied, we will get the situation when the amount of contingent consideration has been included in the total consideration given in the business combination, but in fact, the acquirer has not paid that amount. In its turn, the acquired entity will recognize the contingent consideration as a financial asset according to IFRS 9 Financial Instruments. In that case, it would be appropriately to recognize the contingent consideration as a contingent asset applying IAS 37. In the Article the author will explore the challenges of contingent consideration accounting and suggest the ways of solving the above mentioned problems.

Suggested Citation

  • Gurgen KALASHYAN, 2017. "Accounting For Contingent Considerations In Business Combinations," Law, Society & Organisations, Romanian Foundation for Business Intelligence, Editorial Department, issue 2 (1/2017, pages 53-56, July.
    • Handle: RePEc:cmj:lawsor:y:2017:i:2:p:53-56
    as

    Download full text from publisher

    File URL: http://seaopenresearch.eu/Journals/articles/LSO_2_8.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Business combinations; Contingent consideration; IFRS 3;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cmj:lawsor:y:2017:i:2:p:53-56. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Serghie Dan (email available below). General contact details of provider: https://seaopenresearch.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.