QuickBook Ltd. sells accounting software (SSP ₹ 80,000) with installation services (SSP ₹ 20,000) for a bundled price of ₹ 90,000. The installation…

CA Final · Financial Reporting · MTP · November 2026
QuickBook Ltd. sells accounting software (SSP ₹ 80,000) with installation services (SSP ₹ 20,000) for a bundled price of ₹ 90,000. The installation does not significantly modify the software. How much revenue is allocated to the software license?
(A) ₹ 80,000 (stand-alone selling price)
(B) ₹ 72,000 (proportional allocation)
(C) ₹ 90,000 (full contract price to software)
(D) ₹ 70,000 (after deducting installation SSP)

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Basis: Ind AS 115 Paragraph 74. The transaction price of ₹ 90,000 is allocated to distinct performance obligations in proportion to their stand-alone selling prices: Software = ₹ 90,000 × (80,000 / 1,00,000) = ₹ 72,000.

Topics: Ind AS 115

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic