Under FASB ASC 606, when a contract modification does not result in a separate performance obligation, the additional products are priced at the
A) Standalone price of the product
B) Blended price of original contract and contract modification
C) Average selling price of original selling price and standalone price
D) Selling price specified in contract modification

Question

Quizplus · Accepted Answer

When a contract modification does not result in a separate performance obligation, the accounting for the additional products or services is done by blending the price of the original contract with the price of the modifications. This approach ensures that the revenue recognition reflects the economics of the contract as modified.

Under FASB ASC 606, When a Contract Modification Does Not