A Business Combination Involves a Contingent Consideration

question 8

Multiple Choice

A business combination involves a contingent consideration. It is considered 70% probable that a payment of $500,000 will become payable three years after the acquisition date. Using a 7% discount rate, what liability should be recorded for the contingent consideration on the acquisition date?

• A) $285,704
• B) $350,000
• C) $408,149
• D) $500,000

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Definitions:

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Piaget

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