What does consideration mean on the CPA exam?
Consideration. The bargained-for exchange that makes a promise enforceable. Each side must give up something; a promise to make a gift is not a contract.
Defined against Restatement (Second) of Contracts Sec. 71.
Which CPA exam sections use consideration?
Consideration appears in the REG section of the CPA exam.
Related terms
- variable consideration: Any part of a contract price that is not fixed, such as a bonus, a discount or a refund.
- contract asset: The right to consideration for goods or services already transferred, where the right still depends on something other than the passage of time.
- goodwill: An asset representing the future economic benefits of acquired assets not separately identified, measured as consideration less identifiable net assets.
- transaction price: The consideration an entity expects to be entitled to for transferring goods or services, excluding amounts collected for third parties such as sales tax.
- performance obligation: A promise in a contract to transfer a distinct good or service.
- annual exclusion: The amount a donor may give each recipient each year with no gift tax and no return.