CERTYNEX IFRS ACADEMY

Pellan, a video game publisher, is assessing the constraint on variable consideration in a distribution contract. Which items must it take into account?

Only the likelihood of a reversal, assessed against a fixed threshold of 75%.

The magnitude of the possible reversal relative to cumulative revenue.

Its usual practice of granting price concessions to distributors.

Its wish to smooth its profit from one year to the next.

The fact that the uncertainty will be resolved only after three years.

The fact that the distributor has paid part of the fixed price in advance.