Question

In instances where there is not an observable standalone selling price, the lessor must use an estimate of the standalone selling price and allocate it based on which of the following methods?

A. Expected -cost-plus-a-margin approach

B. Adjusted Market assessment approach

C. Residual Approach

D. Any of the above approaches.

Answer 1

Answer . Option D . ANY OF THE ABOVE APPROACHES

The standalone selling price is defined as the price that an entity would sell the good or service for if they sold it separately to a customer.  ASC 606 includes specific suitable methods for estimating the standalone selling price of goods and services, including Expected cost plus a margin approach, adjusted market assessment approach, residual approach.