Читать книгу Revenue Recognition - Renee Rampulla - Страница 42

A1 Fitness, a health club, enters into a one-year membership with a Susan Jones, a customer with low credit quality. The transaction price of the contract is $120, and $10 is due at the beginning of each month. The standalone selling price of the monthly service is $10.

On the basis of Susan Jones’ credit history and in accordance with the customary business practice of A1 Fitness, Susan Jones is required to pay each month before AI Fitness provides her with access to their health club. In response to non-payment, A1 Fitness’ customary business practice is to stop providing service to the Susan Jones upon non-payment.

Has A1 Fitness met the criteria that collectability is probable?