Question

Under Ind AS 115, an entity is required to identify Performance Obligations at the inception of a contract. Which of the following is the correct criteria for a good or service to be considered distinct, thereby forming a separate performance obligation?

Q: Answer-Under Ind AS 115, an entity is required to identify Performance Obligations at the inception of...

To be considered a distinct performance obligation under Ind AS 115 1. Capable of being distinct The customer can use it on its own or with other resources. 2. Distinct within the context of the contract The promise to transfer is not part of a bundle where the entity provides a significant integration service. If they are highly interrelated Option C, they are usually combined into a single performance obligation and not distinct.

A The customer can benefit from the good or service on its own or together with other readily available resources.

B The entity’s promise to transfer the good or service is separately identifiable from other promises in the contract.

C The good or service is highly dependent on, or highly interrelated with, other goods or services promised in the contract.

D Both (a) and (b) must be satisfied.

E Only (c) must be satisfied, as it represents a combined output

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Under Ind AS 115, an entity is required to identify Performance Obligations at the inception of a contract. Which of the following is the correct criteria for a good or service to be considered distinct, thereby forming a separate performance obligation?

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