Question:
McAfee sells a subscription to its anti-virus software along with a subscription renewal option that allows
renewal at half the prevailing price for a new subscription. Are the software and subscription renewal
option separate performance obligations? Briefly explain your answer.
Answer:
Yes, they are separate. The renewal option is a material right because it allows the customer to renew at a
better price than could be obtained without the right.
McAfee sells a subscription to its anti-virus software along with a subscription renewal option that allows
renewal at half the prevailing price for a new subscription. Are the software and subscription renewal
option separate performance obligations? Briefly explain your answer.
Answer:
Yes, they are separate. The renewal option is a material right because it allows the customer to renew at a
better price than could be obtained without the right.
