For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”
The residual approach in ASC 606 is different from the “residual method” in ASC 985-605, which is used to determine the amount of revenue to be recognized for delivered elements in certain software arrangements (if there is vendor-specific objective evidence of the selling price for the undelivered elements).
See paragraph BC271 of FASB Accounting Standards Update (ASU) No. 2014-09, Revenue From Contracts With Customers.
One method may be to use the range of observable pricing in other transactions for which the SSPs were determined to be reasonable and in line with B’s normal pricing policies and practices.
A material right arises from pricing on an option to acquire additional goods or services in the future that would not have been received if the initial contract had not been entered into. In such cases, the customer with the option has essentially prepaid for the future purchase.