Question:
On what basis is the transaction price of a contract allocated to the contract’s separate performance
obligations?
Answer:
Under the proposed ASU, if an arrangement has multiple separate performance obligations, the seller
allocates the transaction price to the separate performance obligations in proportion to the stand-alone
selling prices of the goods or services underlying those performance obligations. If the seller can’t
observe actual stand-alone selling prices, the seller should estimate them.
On what basis is the transaction price of a contract allocated to the contract’s separate performance
obligations?
Answer:
Under the proposed ASU, if an arrangement has multiple separate performance obligations, the seller
allocates the transaction price to the separate performance obligations in proportion to the stand-alone
selling prices of the goods or services underlying those performance obligations. If the seller can’t
observe actual stand-alone selling prices, the seller should estimate them.
