AC2101 S1 2014 Seminar 20 Revenue.pptx

goal to recognise revenue when or as the entity

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Unformatted text preview: the contract 13 Step 3: Determine the transaction price *  Goal: To determine amount of consideration that an entity expects to be entitled in exchange for promised goods or services. - Estimate variable consideration at expected value or most likely amount (Use the method that is a better prediction of the amount of consideration to which the entity will be entitled) - Adjust for time value of money only if there is a financing component that is significant to the contract - Customer credit risk accounted for under other standards and presented adjacent to revenue line on income statement 14 7 Step 4: Allocate the transaction price *  Goal: To allocate to each separate performance obligation the amount to which the entity expects to be entitled - Allocating on a relative standalone selling price basis will generally meet the goal §༊  Estimate sell...
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