Step 4: Allocate the transaction price to the performance obligations in the
contract—an entity typically allocates the transaction price to each performance
obligation on the basis of the relative stand-alone selling prices of each distinct good
or service promised in the contract. If a stand-alone selling price is not observable, an
entity estimates it. Sometimes, the transaction price includes a discount or a variable
amount of consideration that relates entirely to a part of the contract. The
requirements specify when an entity allocates the discount or variable consideration
to one or more, but not all, performance obligations (or distinct goods or services) in
the contract.