When determining the transaction price, an entity must consider
A) whether the contract terms have been negotiated at arm's-length.
B) both the variable consideration and the time value of money.
C) if the transaction price will be more than the cost of service or good.
D) if the contract contains separate performance obligations.

Question

Quizplus · Accepted Answer

The transaction price in a contract must account for both the variable consideration, which can change based on the outcome of future events, and the time value of money, which reflects the present value of money to be received in the future.

When Determining the Transaction Price, an Entity Must Consider