What it is
Step 4 of ASC 606 allocates the transaction price to the performance obligations in proportion to their standalone selling prices. This workbook builds the transaction price from fixed, variable, noncash and customer-payable components, then allocates it across up to ten obligations.
A discount spreads across all obligations unless observable evidence shows it belongs to some of them, and an exclusion switch handles that case. The workbook then schedules revenue by month for point-in-time and over-time obligations, ties the schedule to the price and writes the entries.
When to use it
- When a contract bundles products, services or licenses sold at a discount.
- When setting up revenue schedules for a new contract in the billing or general ledger system.
- When an auditor tests the allocation and the revenue timing for a bundled contract.
What’s inside
- Transaction price from fixed, variable, noncash and customer-payable consideration
- Ten performance obligations with standalone price, basis and recognition pattern
- Relative allocation, discount allocation and an exclusion switch
- Monthly revenue for 36 months by obligation with a tie to the price
- Inception entry and monthly revenue entry
Standard cited
This template follows ASC 606. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
What is the best evidence of standalone selling price?
The observable price at which the entity sells the good or service separately to similar customers. When none exists the entity estimates it, using an adjusted market assessment, an expected cost plus margin or, in limited cases, a residual approach. The workbook records which basis supports each price.
How is a discount allocated?
In proportion to standalone selling prices across all obligations, unless observable evidence shows the discount relates to only some of them. Select Yes in the exclusion column for obligations the discount does not touch.
How does variable consideration enter?
Enter the estimate after applying the constraint, which includes variable consideration only to the extent a significant reversal is not probable. The estimate itself is a judgment you document outside the workbook.
What if progress is not even over time?
The revenue tab spreads over-time obligations evenly. Replace those monthly amounts with your measure of progress if cost-to-cost or output measures apply.
Related templates
- ASC 606 Revenue Recognition Schedule
- ASC 606 Contract Asset and Liability Rollforward
- Deferred Revenue Rollforward and Ratable Recompute
- Disclosure Checklist: Revenue (ASC 606)
Last updated 11/05/2026. All free templates.