A combinee in a business combination may have preacquisition contingencies to which a value is assigned during the allocation period.

Question

Quizplus · Accepted Answer

In a business combination, the acquirer may recognize and assign a value to the acquiree's preacquisition contingencies during the allocation period, provided the contingencies meet the recognition criteria of being probable and reasonably estimable.

A Combinee in a Business Combination May Have Preacquisition Contingencies