Standalone selling price (SSP)
Standalone selling price (SSP) is the price at which an entity would sell a promised good or service separately to a customer. The best evidence is an observable price from standalone sales to similar customers in similar circumstances. When none exists, the entity estimates SSP using a method that maximises observable inputs.
Standard references
- ASC 606606-10-32-31 to 32-34
- IFRS 15paragraphs 76–80
- Ind AS 115paragraphs 76–80
Worked example
Illustrative: a vendor sells an analytics licence and an onboarding package together and needs an SSP for each.
- Licence: sold on its own 340 times in the last 12 months, median net price $48,000 per year. That is an observable price, so SSP = $48,000.
- Onboarding: never sold separately. Expected cost is $6,000 of consultant time; the target markup on services is 40%.
- Expected cost plus margin: $6,000 × 1.40 = $8,400.
Result: SSPs of $48,000 (licence) and $8,400 (onboarding) feed the relative-SSP allocation of the bundle price.
Illustrative figures for explanation only, not taken from a real contract.
Common mistakes
- Using the list price as SSP without checking what customers actually pay after normal discounts.
- Using the contract's own stated price as SSP by default; a stated price is not presumed to be SSP.
- Picking a different estimation method per contract to reach a preferred answer, instead of applying a documented policy consistently.
- Never refreshing SSP analysis as pricing and discounting change.