Contingent consideration is frequently incorporated in the price structures of merger and acquisition transactions. It is a consideration that depends upon some future uncertain events. The accounting treatment of contingent consideration for entities complying with Ind AS are provided by Ind AS 103 Business Combinations. For entities complying with AS, there is no specific accounting treatment available except for AS 14, which is applicable in the case of Amalgamations.
Key Points Covered:
• Accounting for Contingent Consideration in Books of Buyer
◦ Under Indian Accounting Standards (Ind AS)
◦ Accounting of Contingent consideration under Accounting Standards (AS)
• Contingent Consideration in Standalone Books of Seller
◦ Under Indian Accounting Standards (Ind AS)
◦ Under Accounting Standards (AS)
