What is a Standalone Selling Price (SSP)?

The Standalone Selling Price (SSP) is a fundamental concept in revenue recognition standards (ASC 606 and IFRS 15). It represents the estimated price at which a company would sell a good or service to a customer on a standalone basis, separate from any bundle or other goods or services. This price is used to allocate the total transaction price to each distinct performance obligation within a contract. Oracle Revenue Management uses SSP to ensure revenue is recognized appropriately for each distinct item delivered to the customer.

A. The average of a bundled price is not the SSP; SSP is determined for individual components before allocation, not derived from the final bundle price.

B. This describes the total standalone selling price for all components in a contract, not the SSP of a single component.

C. The list price can be a starting point for determining SSP, but it is not the definition. SSP can be derived using other methods like market assessment or cost-plus.

1. Oracle Financials Cloud, Using Revenue Management, Release 23D, Chapter 2 Revenue Management Basics, Section: Standalone Selling Prices. The documentation states, "The standalone selling price is the price at which an entity would sell a promised good or service separately to a customer."

2. Financial Accounting Standards Board (FASB), ASC 606: Revenue from Contracts with Customers, Section 606-10-32-33. This section outlines the principle of allocating the transaction price based on relative standalone selling prices.