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With the help of an earnout agreement, the purchase price for a company is divided into a fixed component and a future variable component. The total purchase price is thus dependent on actual rather than just projected performance. The accounting for contingent considerations under International Financial Reporting Standards (IFRS) underwent fundamental changes as part of a convergence project in international accounting in 2008. Earnouts must now be consistently recognized at fair value, regardless of their likelihood of occurrence. Subsequent measurement is also subject to change, as in most cases, changes in the recognized fair value of the earnout clause must be recorded in profit or loss. Overall, empirical research showed that the new regulations of IFRS 3 have influenced the effective accounting treatment of earnout clauses.