Allocation Discount

The ASC 606 Standard

When the total contract price is less than the sum of standalone selling prices, the discount must be allocated across the performance obligations. It ensures discounts don't arbitrarily artificially deflate the value of one specific item.

The Real-World Scenario

You sell a $10,000 software package and a $5,000 training package together for $12,000; the $3,000 discount must be shared proportionately between them.

The Spreadsheet Breaking Point

Using manual VLOOKUPs to proportionately spread a non-standard discount across 15 different contract items breaks the moment a line item changes.

The Hidden Cost to the Bottom Line

Allocating the discount to the wrong item makes one product look artificially profitable while making another look like a massive loss leader.

How GAAPX Eliminates the Risk

Automatically distributes the discount proportionately across all distinct performance obligations using exact, real-time SSP math.