S1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be remeasured at fair value with any gain or loss included in profit or loss. S2: If a new entity is formed to issue equity interests to effect a business combination one of the combining entities that existed before the combination shall be identified as the acquirer.
S1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be remeasured at fair value with any gain or loss included in profit or loss. S2: If a new entity is formed to issue equity interests to effect a business combination one of the combining entities that existed before the combination shall be identified as the acquirer.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter6: Audit Evidence
Section: Chapter Questions
Problem 15CYBK
Related questions
Question
A. Both statements are correct.
B. Only S1 is correct.
C. Only S2 is correct.
D. Both statements are incorrect.
![S1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be
remeasured at fair value with any gain or loss included in profit or loss. S2: If a new entity is formed to issue
equity interests to effect a business combination one of the combining entities that existed before the
combination shall be identified as the acquirer.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F12aaf643-49cd-4679-ba92-de526e66091f%2F12b897ce-02ab-4e1c-a5e8-fab002bcbd21%2Feknwbu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:S1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be
remeasured at fair value with any gain or loss included in profit or loss. S2: If a new entity is formed to issue
equity interests to effect a business combination one of the combining entities that existed before the
combination shall be identified as the acquirer.
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