The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price can be a fixed amount of customer consideration, but it may sometimes include variable consideration or consideration in a form other than cash.
Consideration may be variable due to price concessions, volume discounts, rebates, early settlement discounts, performance bonuses or other similar items. The standard compels entities to recognize revenue even when it is variable, i.e. even if there is a degree of uncertainty with regards to the final amount that will be recognized, once the reason for the variability is resolved.