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Under Ind AS 115, the RESIDUAL approach to estimating an SSP is permitted only when:
AThe good or service is sold by competitors but at an unknown price
BThe selling price is highly variable (broad range to different customers at the same time) or the entity has not yet established a price (new product)
CThe good or service is not yet sold by the entity
DThe good or service has high fixed costs relative to its market price
Answer & Solution
Correct answer: B. The selling price is highly variable (broad range to different customers at the same time) or the entity has not yet established a price (new product)
Para 79 — the residual approach (deriving SSP as the residual of transaction price after subtracting observable SSPs of other goods/services) is permitted only when the price is HIGHLY VARIABLE (broad range of standalone prices to different customers) OR the entity has NOT YET ESTABLISHED a price (new product not previously sold on standalone basis). It must not be the default; observable SSPs always come first.
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