Summary of Statement No. 38
Summary of Statement No. 38
Accounting for Preacquisition Contingencies of Purchased Enterprises--an amendment of APB Opinion No. 16 (Issued 9/80)
Summary
This Statement specifies how an acquiring enterprise should
account for contingencies of an acquired enterprise that were in
existence at the purchase date and for subsequent adjustments that
result from those contingencies. Amounts that can be reasonably
estimated for contingencies that are considered probable are
recorded as a part of the allocation of the purchase price.
Subsequent adjustments are included in net income when the
adjustments are determined except in limited circumstances
described in this Statement.