How do you determine if it is just an administrative task/set-up activity vs. a performance obligation?
Performance obligations
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How do you determine if it is just an administrative task/set-up activity vs. a performance obligation?
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An administrative task or set-up activity does not transfer control of a separate service to a customer from which they can benefit. Examples of set-up activities are things like putting processes in place and training employees. Examples of administrative tasks include credit checks and setting up the client’s account. When another entity can provide similar services to customers on a stand-alone basis or the customer could perform the tasks, it is a strong indicator the particular service is a promised service rather than a set-up activity.