Final answer:
The false statement about the identification of separate performance obligations is that they cannot be identified; in fact, identifying and evaluating the distinctiveness of performance obligations is a key step in revenue recognition and accounting.
Step-by-step explanation:
The statement that is FALSE concerning the identification of separate performance obligations is that performance obligations cannot be identified. In the context of revenue recognition and accounting, performance obligations refer to promises in a contract to transfer goods or services to a customer. The requirements for performance obligations are that:
- Performance obligations must be distinct - meaning the customer can benefit from the good or service on its own or with other readily available resources.
- Performance obligations can be accounted for separately - if they are distinct within the context of the contract.
- Performance obligations can be combined - if they are not distinct, they may be bundled and accounted for as a single obligation.
- Performance obligations cannot be identified - This statement is not true as performance obligations can and should be identified for proper revenue recognition.
Therefore, the correct answer to the question about performance obligations is that the statement indicating performance obligations cannot be identified is false. Each obligation should be evaluated and identified to determine if it can be considered distinct and accounted for separately or combined with other obligations.