Standalone Selling Price Estimation Using the Residual Approach

You can estimate the standalone selling price for performance obligations using the residual approach in accordance with the Revenue from Contracts with Customers accounting standard (ASC 606 and IFRS 15).

Using the residual approach to estimate the standalone selling price of a promised good or service is appropriate only when a promised good or service is sold at a broad range of prices or when the standalone selling price isn't yet established.

The residual approach lets you:

• Identify the performance obligation for which a standalone selling price must be estimated using the residual method. The application creates the performance obligation using a performance obligation identification rule or a performance obligation template.
• View the computed residual standalone selling price for the performance obligation in the Manage Customer Contracts page.