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A consultant signs a ₹2 cr fixed-fee contract on 1 April 20X0 with three distinct POs (due diligence, valuation, software implementation). A ₹20 lakh bonus is earned if implementation completes by 30 September 20X0. SSP allocation (without bonus): DD ₹80L, Val ₹20L, SW ₹1 cr. At 1 July, the consultant updates its estimate to include the ₹20L bonus. The bonus should be allocated:
AEqually split among the three POs (₹6.67L each)
BTo the next not-yet-satisfied PO chronologically
CProportionately across all three POs using relative SSPs of ₹80L/₹20L/₹1 cr
DEntirely to the Software Implementation PO — the bonus relates specifically to completing that PO early
Answer & Solution
Correct answer: D. Entirely to the Software Implementation PO — the bonus relates specifically to completing that PO early
Para 85 — the early-completion bonus relates specifically to the entity's efforts/outcome on the software implementation PO. Allocating the entire ₹20L bonus to that PO is consistent with the allocation objective. New total for SW = ₹1.2 cr; cumulative revenue caught-up to 60% complete = ₹72L.
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