Revenue

Standalone Selling Price (SSP)

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Under ASC 606, a contract’s total transaction price must be allocated across each distinct performance obligation based on relative standalone selling price. Tabs automates this end-to-end through Standalone Selling Price (SSP) workflows.

SSP workflow

The SSP workflow has three stages:

  1. Define — Create an SSP memo with an effective date, methods, and values for each product in your catalog
  2. Activate — Approve the memo to govern contract SSP allocation per your configuration
  3. Apply — Contracts signed on or after the effective date automatically allocate transaction price to each performance obligation using the relative SSP method

Prerequisites

To use automated SSP, you need:

  • A configured Product Catalog
  • Contracts with signature dates extracted (or earliest performance obligation start date as fallback)
  • Contracts processed with performance obligations defined with products mapped

SSP methods

Each product in an SSP memo uses one estimation method:

MethodWhen to use
FMV FixedA constant dollar value regardless of sales price
FMV % of DealSSP as a percentage of total transaction price, with optional min/max bounds
Min/Max ClampSSP clamped to a floor or ceiling if sales price falls outside the range
ResidualSSP equals remaining transaction price after all other obligations are carved out. A fallback value is used when the residual pool is exhausted
ObservableUse the sales price from the contract as SSP. Recommended for new products without pricing history

Allocation

Tabs runs a two-phase process for each eligible contract:

Phase 1 — Determine SSP for each performance obligation using the method defined in the active memo. Non-residual methods are computed first; their total is subtracted from the transaction price to determine the residual pool.

Phase 2 — Allocate transaction price using the relative SSP method:

Allocated transaction price = (SSP ÷ Total SSP) × Total Transaction Price

Each contract’s Revenue tab shows the SSP determination and allocation waterfall so you can audit exactly how revenue was allocated.

SSP is locked at contract inception per ASC 606 — existing contracts are not re-allocated when a new memo is approved. Only contracts signed on or after the new memo’s effective date use updated values.

Audit trail

Tabs retains a full audit trail for SSP:

  • SSP memos and approval history
  • Contracts to which each memo was applied
  • Allocation calculations and waterfalls per contract
  • Exceptions found for each SSP memo for review

This supports ASC 606 disclosure and audit requirements.