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An entity sells broadband, voice and modem in various combinations. To codify Ind AS 115 distinctness, the chapter recommends:
ATreating any bundled offering as a single performance obligation
BAssigning each contract clause Boolean parameters (0/1) and using an algorithm with weighted scores to flag distinct performance obligations
CRouting every contract through the auditor for manual classification
DOutsourcing to a tax consultant
Answer & Solution
Correct answer: B. Assigning each contract clause Boolean parameters (0/1) and using an algorithm with weighted scores to flag distinct performance obligations
The chapter codifies contract clauses with Boolean 0/1 parameters, applies an algorithm with weighted scores against defined criteria (service type, benefits, transfer of goods) and flags distinct POs when the total score exceeds a threshold. A bundled-by-default approach contradicts Ind AS 115's distinctness analysis.
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