Contingent Consideration in a Business Combination

  • Print-friendly version
10/16/2013 by Pharmaceuticals & life science
Contingent Consideration in a Business Combination

At a glance

This Pharmaceutical and Life Sciences Industry Alert provides guidance on the accounting for contingent consideration arrangements in business combinations.

This Pharmaceutical and Life Sciences Industry Alert provides guidance on the accounting for contingent consideration arrangements in business combinations. In a business combination, a buyer and seller may not agree on the total purchase price if there are significant uncertainties associated with the acquired business. Often times, the two parties may agree to an additional payment, or contingent consideration, based on the outcome of future events. Contingent consideration arrangements are common within the Pharmaceutical and Life Sciences industry as they can be a convenient way of sharing risks between the buyer and seller.