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FRS102 and earnout loan notes

FRS102 and interest free earnout loan notes

If a subsidiary is acquired and part of the sale consideration is in the form of earnout loan notes to be redeemed in 5 years time based on performance targets over the earnout period and the loan notes carry no interest, what is the accounting and tax in the acquiring company?  The vendors with loan notes are individuals.

Does the loan require discounting to present value in the acquirer with a credit to deemed "interest" income in the P&L and a financial charge each year as deemed "interest" charge as the discount unwinds ? 

Assuming it does the initial credit would appear to be taxable income in its entirety where the loan is after 1 January 2016 as it is charged to P&L in year of acquisition under FRS102, unlike a loan from a shareholder where such credit would appear to be to equity as a capital contribution and not taxable income.   Are there any options in the treatment adopted as if such a loan existed prior to 1January 2016 the transition adjustment under FRS102 for the credit for tax purposes could have been spread over the duration of the loan note. 

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