To account for variable consideration using the most likely amount, the probability of each possible amount is multiplied by the possible amount to get an expected contract price.

Question

Quizplus · Accepted Answer

The most likely amount method involves selecting the single most likely amount in a range of possible outcomes, not calculating a weighted average of all possible outcomes. The explanation provided describes the expected value method, not the most likely amount method.

To Account for Variable Consideration Using the Most Likely Amount