QUESTION 21 Illustration 21–Volume discount incentive HT Limited enters into a contract with a customer on 1 April 2018 to sell Product X for $ 1,000 per unit. If the customer purchases more than 100 units of Product A in a financial year, the contract specifies that the price per unit is retrospectively reduced to $ 900 per unit. Consequently, the consideration in the contract is variable. For the first quarter ended 30 June 2018, the entity sells 10 units of Product A to the customer. The entity estimates that the customer's purchases will not exceed the 100-unit threshold required for the volume discount in the financial year. HT Limited determines that it has significant experience with this product and with the purchasing pattern of the customer. Thus, HT Limited concludes that it is highly probable that a significant reversal in the cumulative amount of revenue recognized (i.e. $ 1,000 per unit) will not occur when the uncertainty is resolved (i.e. when the total amount of purchases is known). Further, in May 2018, the customer acquires another company and in the second quarter ended 30 September 2018, the entity sells an additional 50 units of Product A to the customer. In the light of the new fact, the entity estimates that the customer's purchases will exceed the 100 unit threshold for the financial year and therefore it will be required to retrospectively reduce the price per unit to $ 900. Determine the amount of revenue to be recognize by HT Limited for the quarter ended 30 June 2018 and 30 September 2018.

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