Under the terms of the contingent asset
purchase agreement, Golden Leaf will acquire assets for USD 7,146,582, consisting of USD 1.25m in cash at closing and USD 500,000 of GLH stock based on the VWAP for the 30-days immediately preceding the closing date.
(b) Contingent asset
: A condition or situation existing at the balance-sheet date that mayor may not result in a gain expenditure depending on the outcome of one or more uncertain future events.
Distilled to its basics, our approach is to use cash compensation in banks as a contingent asset
of the banks.
A contingent asset
of [pounds sterling]8.25m should be disclosed, consisting of probability-adjusted damages (75 per cent chance of success x [pounds sterling]10m = [pounds sterling]7.5m) plus the probability-adjusted recovery of legal fees from the defendant (75 per cent x Lim legal fees = [pounds sterling]0.75m).
"A shop in Oxford Street is much easier to value than a cask of maturing whiskey," said a tax lawyer with experience of contingent asset
"A shop in Oxford Street is much easier to value than a cask of maturing whisky," said a tax lawyer with experience of contingent asset
A contingent asset
or a liability under ASC 805 mimics ASC 450, Contingencies, and requires that at the acquisition date, recognition occurs if both of the following criteria are met:
The minimum financial strength of an institution which provides a bank guarantee, letter of credit or custodianship for a contingent asset
comprising security over property or other assets has been weakened from AA- to A-.
The use of this so-called contingent asset
was part of a sophisticated programme of measures to reduce the deficit and was hailed as an indication of the increasingly innovative approach that companies are taking to deal with pensions liabilities.
Other assets may be offered including contingent asset
agreements, letters of credit from secure third parties.
It could therefore be more appropriate to redefine goodwill as a contingent asset
. In effect, this means an asset that hasn't been realised at the date of the balance sheet.
CPC 00--Basic Conceptual Pronouncement, CPC 01 Impairment of assets, CPC 03--Statement of cash flow, CPC 05--Related party disclosures, CPC 10--Share based payment, CPC 23--Accounting Policies, Change in Accounting Estimates and Correction of Errors, CPC 24 Subsequent events and CPC 25--Provisions, contingent assets