Under asc 606, which of the following methods, if any, are acceptable for estimating the amount of variable consideration in contracts with customers?
adjusted market assessment
minimum amount in the range of possible amounts
the amount of variable consideration must be estimated by applying consistently throughout the contract period one of two methods:
(1) expected value or (2) most likely amount.
the expected value method may provide an appropriate estimate if an entity has a large number of contracts with similar characteristics.
the expected value is the sum of probability-weighted amounts in the range of possible consideration amounts.
the most likely amount method may provide an appropriate estimate if the contract has only two possible outcomes.
the most likely amount is the single most likely amount in a range of possible consideration amounts.