CMA 2020 Part 1 Lec 6

CMA 2020 Part 1 Lec 6

https://youtu.be/6RhPtiOXs1k

شاهد الفيدو التالى به اكمال شرح الاعتراف بالايراد
CMA 2020 Part 1 Lec 6
https://youtu.be/6RhPtiOXs1k

e.       Variable Consideration

1)      If a contract includes a variable amount, an entity must estimate the consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer. For example, the contract price may vary because of the following:

a)      Refunds due to a right of return provided to customers

b)      Sales incentives

c)       Prompt payment discounts

d)      Volume discounts

e)      Other uncertainties in contract price based on the occurrence or nonoccurrence of some future event

2)      Variable consideration is estimated using one of the following methods:

a)      The expected value is the sum of probability-weighted amounts in the range

of possible consideration amounts. This method may provide an appropriate estimate if an entity has many contracts with similar characteristics.

b) The most likely amount is the single most likely amount in a range of possible consideration amounts. This method may provide an appropriate estimate if the contract has only two possible outcomes; e.g., a construction entity either will receive a performance bonus for finishing construction on time or will not.

3)      The estimated transaction price must be updated at the end of each reporting period.

4)      Constraint

a)       Revenue from variable consideration is recognized only to the extent that it is probable that a significant reversal will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

5)      A volume discount offered as an incentive to increase future sales requires the customer to purchase a specified quantity of goods or services to receive a discount. The discount may be applied (a) prospectively on additional goods purchased in the future or (b) retrospectively on all goods purchased to date.

a)       A prospective volume discount that provides a material right to the customer is accounted for as a separate performance obligation in the contract.

b)      Retrospective volume discounts are accounted for as variable consideration. The uncertainty of the contract price for current goods sold is based on the occurrence or nonoccurrence of some future event (i.e., whether the customer completes the specified volume of purchase).