Question

An obligation of an acquirer to pay contingent consideration to the former owners of an acquired entity in a business combination can be recognized as which of the following?

A Liability An Equity Item

a. Yes Yes
b. Yes No
c. No Yes
d. No No

Answer 1

yes

Step-by-step explanation:

yes

Answer 2

option A(Yes Yes ) is correct.

Step-by-step explanation:

An obligation to pay contingent consideration in a business combination may be recognized by the acquirer as either a liability or as an equity item, depending on the nature of the obligation under the provisions of FASB #150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity."