Chelsea sells equipment to a customer. The total selling price includes installa

Question

Chelsea sells equipment to a customer. The total selling price includes installation and training services. Companies other than Chelsea also provide installation and training services, but the customer has chosen to have Chelsea perform these tasks. What is (are) Chelsea’s performance obligation(s)?

Two separate performance obligations: one performance obligation consisting of the sale of the equipment and the sale of a second performance obligation: the sale of a separate unit (installation and training).

Explanation / Answer

Answer is

Three separate performance obligations: the sale of the equipment, the sale of its installation and the sale of training services.

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