Читать книгу Revenue Recognition - Renee Rampulla - Страница 43

Big Pharma Inc. sells 1,000 units of a prescription drug to customer Jenco Corporation for promised consideration of $1 million. This is the first sale Big Pharma Inc. has made to customer Jenco Corporation, who is located in a new region, which is experiencing significant economic difficulty. Thus, Big Pharma Inc. does not expect to be able to collect the full amount of the promised consideration from Jenco Corporation. Despite the possibility of not collecting the full amount, Big Pharma Inc. expects the region’s economy to recover over the next two to three years and determines that a relationship with Jenco Corporation could help it forge relationships with other potential customers in the region.

Based on the assessment of the facts and circumstances, Big Pharma Inc. determines that it expects to provide a price concession and accept a lower amount of consideration from Jenco Corporation. Accordingly, Big Pharma Inc. concludes that the transaction price is not $1 million and, therefore, the promised consideration is variable. Big Pharma Inc. estimates the variable consideration and determines that it expects to be entitled to $400,000.

Is consideration probable because the implicit price concession is not the stated price consideration Big Pharma Inc. expects to receive from Jenco Corporation?