When a Contingent Consideration Arising from a Business Combination Is

question 47

Multiple Choice

When a contingent consideration arising from a business combination is classified as a liability, how is any difference between the original estimate of the amount to be paid and the actual amount paid accounted for if the difference arises due to a change in circumstances?

• A) As an adjustment to the consideration paid for the subsidiary.
• B) As an adjustment to an estimate included in the determination of net income.
• C) As a direct adjustment to consolidated retained earnings.
• D) As an adjustment to consolidated contributed surplus.

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