Step 4: Allocate the Transaction Price
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Step 4: Allocate the Transaction Price
The best evidence of a standalone selling price is the price of goods or services sold separately by the Company in similar circumstances and to similar customers; a contractually stated price or a list price for goods or services can be used.
If a standalone selling price is not directly observable, it must be estimated. The following approaches may be used:
- Adjusted-market-assessment;
- Expected-cost-plus-margin; or
- Residual value.