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Under Ind AS 115, two or more contracts with the same customer (or related parties) entered into at or near the same time should be combined and accounted as a single contract if which condition is met?
AThe contracts are negotiated as a package with a single commercial objective
BThe contracts have clearly separate commercial objectives
CThe contracts each cross a value threshold of ₹10 crore
DThe contracts are with parties resident in different jurisdictions
Answer & Solution
Correct answer: A. The contracts are negotiated as a package with a single commercial objective
Para 17 requires combination if any of: (i) the contracts are negotiated as a package with a single commercial objective, (ii) the price/performance of one contract depends on the other, or (iii) the goods/services in the contracts together form a single performance obligation. Separate commercial objectives is the opposite trigger — do not combine. Value threshold and jurisdiction are not criteria.
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