SSP range
An SSP range is a band of prices, commonly set around the median of observable standalone sales, within which a contract's stated price is accepted as its standalone selling price. ASC 606 does not prescribe ranges, but they are common practice; prices outside the band are adjusted to a point, such as the nearer boundary, under a written policy.
Standard references
- ASC 606606-10-32-32 to 32-33 (general SSP guidance; ranges are a practice, not a separate paragraph)
- IFRS 15paragraphs 77–78
Worked example
Illustrative: support is sold at a median of 18% of the net licence price in observable sales. Policy: the band is the median ±15%.
- Band: 18% × 0.85 = 15.3% to 18% × 1.15 = 20.7%.
- Contract A prices support at 19%: inside the band, so 19% is used as SSP.
- Contract B prices support at 12%: outside the band, so SSP is set at the nearer boundary, 15.3%, per policy.
Result: Contract A uses its stated price; Contract B is adjusted to 15.3% before allocation.
Illustrative figures for explanation only, not taken from a real contract.
Common mistakes
- A band so wide that every price falls inside it.
- Not refreshing the band as pricing changes.
- Adjusting out-of-band prices to the midpoint in some contracts and the boundary in others.
- Too few observable transactions to support the band.