Where there is a significant change in ownership of the company, ISA 210 Agreeing the Terms of Audit Engagements recommends that a new audit engagement letter is sent to avoid misunderstandings.

At 31 March 2015, the deferred consideration of $12,650 would need to be discounted by 10% for one year to $11,500 (effectively deferring a finance cost of $1,150). The total amount credited to profit or loss would be $24,150 (12,650 + 11,500).