CERTYNEX IFRS ACADEMY

Ilvane signs a contract of 1,000,000 with a customer in a market where it has a practice of granting price concessions. It expects (documented judgement, case datum) to accept 800,000 in settlement. The customer has the ability and intention to pay 800,000, but not 1,000,000. On what amount does Ilvane assess collectability?

On 1,000,000, the contractual price; as collection of that amount is not probable, there is no contract.

On 800,000, the consideration to which Ilvane expects to be entitled given the price concession.

On no amount: the existence of a price concession removes the need to assess collectability.

On 200,000, the amount of the expected concession.