S1: Under Ind AS 115, if a contract contains multiple performance obligations, the transaction price must be allocated to each obligation based on their relative standalone selling prices. S2: If the standalone selling price is not directly observable, the entity must estimate it using the adjusted market assessment approach or the expected cost plus a margin approach. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Under Ind AS 115, if a contract contains multiple performance obligations, the transaction price must be allocated to each obligation based on their relative standalone selling prices. S2: If the standalone selling price is not directly observable, the entity must estimate it using the adjusted market assessment approach or the expected cost plus a margin approach. Which statement(s) is/are correct?
A. S1 only
B. S2 only
C. Both S1 and S2
D. Neither S1 nor S2
Answer: Option C
Solution (By JKSSB Mock Tests)
Both statements are correct as per Ind AS 115. The transaction price must be allocated based on standalone selling prices, and if not directly observable, the entity must estimate it using approved methods like adjusted market assessment or expected cost plus margin.
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