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Chapter 10 — Business Combinations

10.6 Arrangements for Contingent Payments to Employees or Selling Shareholders

10.6 Arrangements for Contingent Payments to Employees or Selling Shareholders

During negotiations of a business combination, an acquirer may agree to make a payment at some point in the future to one or more selling shareholders or to acquiree employees who become employees of the combined entity (or otherwise provide goods or services to the combined entity) after the acquisition date. For example, a payment to a selling shareholder may be contingent on whether the following continue to be employed at the combined entity after the acquisition: the selling shareholder, a different selling shareholder, or a nonshareholder employee. See Section 6.2.3 of Deloitte’s Roadmap Business Combinations for additional guidance.