The firm Solvarine manages the energy renovation of a building for a fixed fee of 150,000, plus an energy savings incentive capped at 25,000. At inception, Solvarine included 10,000 for the incentive in the transaction price, an amount it then considered highly probable not to have to reverse (case data). The final measurements set the incentive at 18,000. Compute the change in the transaction price and the revised transaction price.
- Fixed fee
- 150,000
- Maximum incentive
- 25,000
- Incentive initially included in the transaction price
- 10,000
- Incentive finally earned
- 18,000