Yakub02
Banned
Variable consideration
The amount of consideration for the sale of goods and services might be variable due to the existence of discounts, price concessions, incentives, performance bonuses, penalties and similar items.
Consideration can also vary if its amount is contingent on the occurrence or non occurrence of a future event. For example, where a product is sold with a right of return or a fixed amount is promised as a performance bonus on achievement of a specified milestone.
The variability relating to the consideration promised by a customer may be explicitly stated in the contract. However, in addition to the terms of the contract, the consideration is variable if either of the following circumstances exists:
the customer has a valid expectation arising from an entity’s customary business practices, published policies or specific statements that the entity will accept an amount of consideration that is less than the price stated in the contract.
other facts and circumstances indicate that the entity’s intention, when entering into the contract with the customer, is to offer a price concession to the customer.
If consideration includes a variable amount an entity must estimate the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer.
The amount of consideration for the sale of goods and services might be variable due to the existence of discounts, price concessions, incentives, performance bonuses, penalties and similar items.
Consideration can also vary if its amount is contingent on the occurrence or non occurrence of a future event. For example, where a product is sold with a right of return or a fixed amount is promised as a performance bonus on achievement of a specified milestone.
The variability relating to the consideration promised by a customer may be explicitly stated in the contract. However, in addition to the terms of the contract, the consideration is variable if either of the following circumstances exists:
the customer has a valid expectation arising from an entity’s customary business practices, published policies or specific statements that the entity will accept an amount of consideration that is less than the price stated in the contract.
other facts and circumstances indicate that the entity’s intention, when entering into the contract with the customer, is to offer a price concession to the customer.
If consideration includes a variable amount an entity must estimate the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer.