Revenue – ifrs 15 handbook

Guidance on allocating a discount typically applies to contracts 
with at least three performance obligations
IFRS 15.BC283
The discount in the contract has to be substantially the same as the discount 
attributable to the bundle of goods or services under the guidance on allocating 
a discount entirely to one or more performance obligations. As a result, an 
entity will typically be able to demonstrate that the discount relates to two or 
more performance obligations, but it will be difficult to have sufficient evidence 
to allocate the discount entirely to a single performance obligation. Therefore, 
this provision is not likely to apply to arrangements with fewer than three 
performance obligations.
Additional application examples
Example 4 – Allocating a discount: Discount allocated entirely to 
one or more, but not all, performance obligations in a contract
IFRS 15.IE167–IE172
Telco C enters into a contract with a residential customer to sell phone, internet 
and television services for a total amount of 120. C regularly sells the products 
individually for the following prices.
Product
Stand-alone selling prices
Phone
40
Internet
55
Television
45
Total
140
C also regularly sells phone and internet services together for 75. 
The contract includes a discount of 20 on the overall transaction (140 - 120), 
which is allocated proportionately to the three services in the contract when 
applying the relative stand-alone selling price method. However, because C 
regularly sells phone and internet services as a bundle for 75 (at a 20 discount 
compared with their total selling price of 95 (55 + 40)) and television services 
for 45, it has evidence that the entire discount should be allocated to the phone 
and internet services.