Ingénova designs a production line for a customer for a fixed price of EUR 400,000. A bonus of EUR 50,000 will be due if the line is delivered before an agreed date; only two outcomes are possible. Ingénova estimates the bonus using the most likely amount, which is earning the bonus, and concludes, based on its judgement, that it is highly probable that including it will not result in a significant reversal of cumulative revenue. The contract also provides that Ingénova pays the customer EUR 20,000 as a contribution to fitting out its premises, without receiving any distinct good or service in exchange. Compute the transaction price.
- Fixed contract price
- 400,000
- Early delivery bonus
- 50,000
- Contribution paid to the customer
- 20,000