Standalone Selling Price and Allocating the Transaction Price
Written by Harry Prabandham
Curated by Rubric Financial
Last updated
1 / 5
Where SSP Fits in the Five Steps
- Standalone selling price is the fourth step of ASC 606, applied after you identify the contract and its performance obligations.
- SSP is the price at which an entity would sell a promised good or service separately to a customer.
- You need an SSP for each distinct performance obligation before you can allocate the transaction price.
- For SaaS contracts, common obligations include the subscription, implementation services, premium support, and sometimes training.
Go deeper on this topic: SaaS Revenue Recognition Under ASC 606: A Founder's Guide to Getting It Right→
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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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