An exception to the general rule is that the transaction price should be allocated based on the relative standalone selling prices occurs when the contract includes variable consideration.

Question

Quizplus · Accepted Answer

When a contract includes variable consideration, the transaction price is allocated based on an estimation of the amount to which the company will be entitled. This is because the selling price may vary, so a fair allocation of costs needs to be made.

An Exception to the General Rule Is That the Transaction