In the final settlement, of the contingent consideration, which of the following statements is valid? I. If the contingent consideration is classified as equity, the amount shall be measured upon settlement and recognized as part of profit and loss. II. If the contingent consideration is classified as financial liability, the amount shall be measured at fair value upon settlement with any gain or loss recognized as part of profit and loss
In the final settlement, of the contingent consideration, which of the following statements is valid? I. If the contingent consideration is classified as equity, the amount shall be measured upon settlement and recognized as part of profit and loss. II. If the contingent consideration is classified as financial liability, the amount shall be measured at fair value upon settlement with any gain or loss recognized as part of profit and loss
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter9: Auditing The Revenue Cycle
Section: Chapter Questions
Problem 19MCQ
Related questions
Question
In the final settlement, of the contingent consideration, which of the following statements is valid?
I. If the contingent consideration is classified as equity, the amount shall be measured upon settlement and recognized as part of
II. If the contingent consideration is classified as financial liability, the amount shall be measured at fair value upon settlement with any gain or loss recognized as part of profit and loss.
a. I only
b. Both I and II
c. II only
d. Neither I nor II
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Auditing: A Risk Based-Approach to Conducting a Q…
Accounting
ISBN:
9781305080577
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
South-Western College Pub
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Auditing: A Risk Based-Approach to Conducting a Q…
Accounting
ISBN:
9781305080577
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
South-Western College Pub
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT