Which of the following is NOT a method for calculating or ascertaining the amount of purchase consideration?

Correct option is C

The Gross Receipts Method is not a recognized method for determining purchase consideration in mergers or acquisitions. The commonly used methods include:
1. Net Payment Method: Calculating the amount paid in cash or shares for the acquisition.
2. Net Assets Method: Determining the value of net assets acquired (assets minus liabilities).
3. Share Exchange Method: Determining the consideration by exchanging shares of one company for shares in another.
Information Booster
Purchase consideration refers to the total value paid by the acquiring company to shareholders of the target company in case of mergers, acquisitions, or takeovers.
Additional Knowledge
· Valuation in Mergers: Accurate determination of purchase consideration is critical for ensuring fair treatment of shareholders and regulatory compliance.