Business Pitch Dictionary by pitch.dog
Accounting policy, GAAP & adjustments · Working

Variable consideration

Also called: contingent consideration

ELI5

Contract consideration that varies because of discounts, refunds, bonuses, penalties or other conditions.

Used in conversation

“Can we state who receives the right created by variable consideration, and when it applies?”

Pitch context

You will see “Variable consideration” in financial models, budgets, board packs and investor materials when the discussion reaches accounting policy, gaap & adjustments.

Why it matters: In accounting policy, gaap & adjustments, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Sources & evidence · 4

Direct term-level sources and supporting source families.