Performance obligations are contractual commitments that the reporting entity must comply with, in order to be entitled to consideration. Even if a good or service is agreed to be given/rendered free of charge, consideration must be allocated to it. We will deal with this last point, in another article.
How are POs classified? POs are either:
A good or service (or a bundle of goods or services) that is distinct;
A series of distinct goods or services that are substantially the sameand have the same pattern of transfer to the customer.