Which statement is correct about multiple performance obligation arrangements?
A)The residual method must normally be used.
B)The relative stand-alone selling price method must normally be used.
C)There is no specific method that must be used.
D)The adjusted market assessment approach is an acceptable residual approach that may be used.

Question

Quizplus · Accepted Answer

The relative stand-alone selling price method is normally used to allocate the transaction price to the different performance obligations in a contract according to ASC 606, Revenue from Contracts with Customers. This method requires estimating the price at which the company would sell the promised goods or services separately to a customer.

Which Statement Is Correct About Multiple Performance Obligation Arrangements