Revenue – ifrs 15 handbook

6.1 
In scope
IFRS 15.6
A ‘customer’ is a party that has contracted with an entity to obtain goods or services 
that are an output of the entity’s ordinary activities in exchange for consideration.
Contract
Goods and services
Consideration
Entity
Customer
Example 1 – Identifying in-scope contracts
Company X is in the business of buying and selling commercial property. It 
sells a property to Purchaser Y. This transaction is in the scope of the revenue 
standard because Y has entered into a contract to purchase an output of X’s 
ordinary activities and is therefore considered a customer of X.
Conversely, if X was a manufacturing entity selling its corporate headquarters to 
Y, then the transaction would not be a contract with a customer because selling 
real estate is not an ordinary activity of X. For further discussion on which parts 
of the model apply to contracts with a non-customer, see 
Section 10.7
.

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6 Scope | 163
6.2 Out of scope
| 
Determining whether an activity is ‘ordinary’ may require 
judgement
IFRS 15.BC52–BC53
The definition of a customer focuses on an entity’s ordinary activities. 
However, ‘ordinary activities’ are not defined. In some cases, the assessment 
of whether a good or service is an output of the entity’s ordinary activity may 
be straightforward – e.g. a retailer selling goods to its customers. However, in 
other cases the assessment may require judgement – e.g. if a retailer enters 
into a co-branding arrangement with a bank and provides marketing services, 
judgement may be required to assess whether the bank is the customer of the 
retailer for the marketing services.