Business, 13.03.2020 03:16 plshelpomg

Allocation of Variable Consideration. Green-Up Inc. contracts with a building manager to provide goods and services to
enhance energy efficiency. It offers consulting services, including recommending ways to increase energy efficiency and monitor performance. It also provides items such as thermostats and automatic light switches as part of the contract.
Green-Up charges 60% of the reduction in energy usage during the rst year as a consulting fee. Green-Up determines
that the consulting services comprise one performance obligation and the items provided are another performance
obligation. The estimated standalone selling prices are $180,000 for the consulting services and $100,000 for the items to
increase energy efficiency. The stated price in the contract for the items provided is a xed payment of $100,000. The
price stated for the consulting fees is 60% of the customer’s reduction in future energy costs. Green-Up estimates the
variable consideration for the consulting services to be $180,000. What amount of the transaction price should Green-Up
allocate to each performance obligation?

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Allocation of Variable Consideration. Green-Up Inc. contracts with a building manager to provide goo...

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