Under FASB ASC 606, when multiple performance obligations exist in a contract, they should be accounted for as a single performance obligation when
A) Each service is interdependent and interrelated
B) Both performance obligations are distinct but interdependent
C) The product is distinct within the contract
D) Determination cannot be made

Question

Quizplus · Accepted Answer

According to FASB ASC 606, performance obligations should be accounted for as a single performance obligation when they are interdependent and interrelated. Therefore, option A is the best choice. Option B states that the performance obligations are distinct, so they should not be accounted for as a single performance obligation. Option C relates to a situation where there is only one performance obligation that is distinct, so it also does not apply. Option D is not a valid choice as it does not provide a clear answer.

Under FASB ASC 606, When Multiple Performance Obligations Exist in a Contract