Ch18 - Consolidated SoFP

Question 1

Deferred Consideration on the SoFP

Answer 1

Non-Current Liability

Question 2

If deferred consideration is presented to you

Answer 2

Find the PV of the cash e.g. $375k vs $500k.
$375k goes into consideration value, the other side goes to Non-current Liabiliity in W5
If purchased 2 years. Multiply the PV by the discount factor^2, the interest unwind also goes to Deferred Consideration in the NCL