Determining Transaction Price

Question 1

What is the expected value method?

Answer 1

Weighted approach to estimate the total transaction price.

Question 2

What is the most likely amount method?

Answer 2

Use this method when there are two discreet outcomes.

Question 3

If there is a significant financing component, how do you account for that revenue?

Answer 3

Revenue: Will always be the selling price

Note Receivable   XX
Sales Revenue     (XX)