Cash consideration

[Table of Contents](#i36695dc5143241f795c32e47bf5f4b3d_7)CBRE GROUP, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires that an acquirer entity in a business combination recognize and measure contract assets and liabilities acquired in a business combination at the acquisition date in accordance with Topic 606 as if the acquirer entity had originated the contracts. This ASU is effective for fiscal years beginning after December 15, 2022, and interim periods within those years. Early application of the amendments is permitted but should be applied to all acquisitions occurring in the annual period of adoption. The amendment should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We are evaluating the effect that ASU 2021-08 will have on our consolidated financial statements and related disclosures, but do not expect it to have a material impact.In November 2021, the FASB issued ASU 2021-10, “Disclosures by Business Entities about Government Assistance.” This ASU requires annual disclosures that increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. This ASU is effective for fiscal years beginning after December 15, 2021. Early application is permitted. The amendments should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. We are evaluating the effect that ASU 2021-10 will have on our consolidated financial statements and related disclosures, but do not expect it to have a material impact.4.Turner & Townsend AcquisitionOn November 1, 2021, we acquired a 60% ownership interest in, and entered into a strategic partnership with Turner & Townsend Holdings Limited (Turner & Townsend). Turner & Townsend is a leading professional services company specializing in program management, project management, cost and commercial management and advisory services across the real estate, infrastructure and natural resources sectors, and is reported in our Global Workplace Solutions segment. The combined partnership is expected to generate strategic growth opportunities in the project management space for both entities.The Turner & Townsend Acquisition was treated as a business combination under ASC 805 and was accounted for using the acquisition method of accounting. We were deemed the accounting acquirer as we obtained control through an all-cash transaction and were the larger entity by revenue and by assets. Operating results for Turner & Townsend are included in the consolidated statements of operations for the year ended December 31, 2021 from the date of the acquisition.The Turner & Townsend Acquisition was funded with cash on hand. The following summarizes the consideration transferred at closing for the Turner & Townsend Acquisition (dollars in thousands):

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Cash consideration (1) | $ | 722,595  |  |
| Deferred consideration (2) | 494,349  |  |
| Total consideration | $ | 1,216,944  |  |

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)Represents cash paid at closing(2)Represents the fair value of deferred consideration, to be settled in cash, with the only remaining condition on such payments being the passage of timeThe deferred consideration amount above represents a total payment of $591.2 million less a discount of $96.9 million which will be accreted through the payment date. A portion of the discount is attributable to the time value associated with the contractual payment dates of 3-4 years and will be recorded as interest expense. The remaining discount is attributable to the time value associated with the deferred payment date (10th anniversary of closing) if a seller is no longer employed on the contractual payment date and will be recorded as compensation expense. The following represents the summary of the excess purchase price over the fair value of net assets acquired and fair value of non-controlling interest (dollars in thousands):

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Purchase price | $ | 1,216,944  |  |
| Less: Estimated fair value of net assets acquired (see table below) | 152,027  |  |
| Plus: Estimated fair value of non-controlling interest (1) | 32,416  |  |
| Excess purchase price over estimated fair value of net assets acquired | $ | 1,097,333  |  |

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)Represents fair value of legacy non-controlling interest of Turner & Townsend81
