Which of the following statements in relation to contingent consideration is incorrect?
A) At acquisition date, contingent consideration is measured at fair value.
B) Where the contingent consideration is classified as equity, there is no remeasurement required on settlement.
C) Subsequent adjustments to contingent consideration affect the goodwill calculated at acquisition date.
D) Changes in the amount of an expected cashflow where the contingent consideration represents a liability that is within the scope of AASB 137/IAS 37 are accounted for through profit and loss.

Question

Quizplus · Accepted Answer

Subsequent adjustments to contingent consideration do not affect the goodwill calculated at acquisition date. Goodwill is measured at acquisition date and is not subject to subsequent remeasurement, except in very limited circumstances.

Which of the Following Statements in Relation to Contingent Consideration