TREATMENT OF POST-ACQUISITION ADJUSTMENTS

摘要

This example shows the changes in treatment of post-acquisition adjustments when moving from current UK GAAP to FRS 102. A company purchases a subsidiary on 15 January 20X1. It pays cash consideration of £1m; a further £200,000 will be payable if the acquiree meets certain challenging performance targets in the two years to 31 December 20X2. The fair value of the net assets acquired is £600,000. This includes a provision of £100,000 for a court case against the subsidiary, in progress at the acquisition date.