Under which of the following circumstances is it most appropriate to use the residual method to estimate stand-alone selling prices?
A) The seller hasn't previously sold the product and hasn't determined a price for it.
B) The seller provides the product bundled with other goods or services.
C) The seller does not have competitors from which to observe market prices of similar products.
D) The seller is unable to accurately estimate variable consideration associated with the contract.

Question

Quizplus · Accepted Answer

The residual approach is allowed only if the stand-alone selling price is highly uncertain, either because the seller hasn't previously sold the good or service and hasn't yet determined a price for it, or because the seller provides the same good or service to different customers at substantially different prices.

Under Which of the Following Circumstances Is It Most Appropriate