Question
Company A sells a drug to a hospital. Under the terms of the contract, if at least 80% of patients treated with the drug over
Company A sells a drug to a hospital. Under the terms of the contract, if at least 80% of patients treated with the drug over a 6-month period do not show measurable improvement, the hospital is entitled to a 50% refund. Based on historical data, Company A considers it likely that they will have to pay the refund. How should revenue be recognized?
A.All revenue recognition must be delayed until the outcome is known
B. 20% of the revenue can be recognized immediately
C.50% percent of the revenue can be recognized immediately
D.70% of the revenue can be recognized immediately
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