alleryStart learning →An earn-out liability moves from Rs 40 lakh to Rs 55 lakh as sales targets are hit. The Rs 15 lakh goes to?
AProfit or loss
BAdded to goodwill
COther comp. income
DCapital reserve
Answer & Solution
Correct answer: A. Profit or loss
Meeting a post-acquisition target is not a measurement period adjustment, so the fair value change of a financial liability hits profit or loss.
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