Contingent Consideration: Striking a Deal on Future Performance
We take a closer look at contingent consideration in this episode, aka earn-outs, from both a buyer and seller’s perspective.
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Show Notes
When buyers and sellers don’t completely see eye-to-eye about future performance – and the purchase price – at closing, contingent consideration can save the day. However, accounting for it is another matter. So join hosts Adam Olsen, Sarah Cage Richter, and Embark resident guru Nicole Harger for a discussion on earnouts, where they cover areas like:
- What is contingent consideration?
- Common types of contingent consideration
- Advantages and disadvantages of earn-outs for buyers and sellers
- Tips and insights on constructing earn-out arrangements
- Classifying and subsequently accounting for earn-outs
For more information on contingent consideration:
- ASC 480, Distinguishing Liabilities from Equity
- ASC 815, Derivatives and Hedging
- ASC 805, Business Combinations
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