How is the transaction price to be measured by the entity when receiving non-cash consideration from a customer?

Question

Quizplus · Accepted Answer

The transaction price when receiving non-cash consideration from a customer should be measured at the fair value of the non-cash consideration received from the customer. This is because fair value is the most reliable and relevant measurement for non-cash consideration. The entity should determine the fair value of the non-cash consideration received based on the market value of the consideration or other available information. Option A is incorrect because it measures the fair value of goods and/or services transferred to the customer, not the non-cash consideration received. Option B is also incorrect because it applies to measuring the transaction price when using the time value of money. Option D is incorrect because book value is not a relevant measurement for determining the transaction price.

How Is the Transaction Price to Be Measured by the Entity