paragraphs 50-59

BC189 The boards noted that in contracts with customers in which the promised consideration is variable, an entity needs to estimate the amount of consideration to which the entity expects to be entitled. Consequently, the boards decided to provide requirements that address:

(a) identifying when variable consideration is present in a contract with a customer (see paragraphs BC190-BC194);

(b) the methods for estimating variable consideration (see paragraphs BC195-BC202);

(c) when those estimates of variable consideration should be constrained and, thus, not included in the transaction price (see paragraphs BC203-BC223); and

(d) how to account for subsequent changes in the transaction price (see paragraphs BC224-BC228).

Identifying variable consideration

BC190 The boards noted that variable consideration can arise in any circumstance in which the consideration to which the entity will be entitled under the contract may vary. The examples in paragraph 51 of IFRS 15 include common types of variable consideration that may occur in a contract with a customer.