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3 Cards in this Set
- Front
- Back
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What is the treatment of Contingent Assets and liabilities? |
IFRS - contingent liability whose fair value can be measured reliably are recognized at the time of acquisition ( contingent assets never recognized). In subsequent period, contingent liabilities are measured at the higher of the value initially recognized or the best estimate of the amount needed to settle the liabilities. US GAAP - contractual contingent assets and liabilities are recorded at fair value on acquisition date. Non contractual contingent assets are also recorded if they meet the definition of asset or liability. Subsequent measurement is same as IFRS, while contingent assets are recognized at the lower of the initial value and the best estimate of the future settlement amount |
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In process R&D treatment ? |
It is capitalized as an intangible asset under both US GAAP and IFRS. They are subsequently amortized (if successful) or impaired (if unsuccessful) |
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What is contingent consideration? |
Contingent consideration (specific extra amount is payable to the former shareholder of the subsidiary if certain earnings or revenue targets are met) such consideration is recognized at fair value under both IFRS and US GAAP as asset liability or equity. subsequent change in value are recognized in income statement. |
