Revenue – ifrs 15 handbook

Example 1 – Cable television service and additional premium 
channels
Cable Company B contracts with Customer D to provide television services for 
a fixed monthly fee for 24 months. The base television services package gives 
D the right to purchase additional premium channels. In Month 3, D adds a 
premium sports channel for an additional 5 per month, which is the price that all 
customers pay for the premium sports channel (i.e. it is priced at its stand-alone 
selling price). 
The premium channel can be added or dropped by D without affecting the base 
cable television service. Therefore, the ability to add the premium channel to the 
package represents an option to purchase additional goods or services.
At contract inception, B concludes that because the option to purchase the 
premium channel is priced at its stand-alone selling price, the option is not a 
material right. Therefore, the option is not identified as a performance obligation 
at contract inception. B recognises revenue for the premium channel in Month 3 
when it provides the services.
Example 2 – Product sold with a discount voucher 
IFRS 15.IE250–IE253
Retailer R sells a computer to Customer C for 2,000. As part of this arrangement, 
R gives C a voucher. The voucher entitles C to a 25% discount on any purchases 
up to 1,000 in R’s store during the next 60 days. R intends to offer a 10% discount 
on all sales to other customers during the next 60 days as its seasonal promotion. 
R regularly sells this model of computer for 2,000 without the voucher.
R notes that the discount voucher provides a material right that C would not 
receive without entering into the original sales transaction. This is because C 
receives a 15% incremental discount compared with the discount expected 
to be offered to other customers (25% discount voucher - 10% discount for all 
customers). Therefore, the discount voucher is a separate performance obligation.
R estimates that there is an 80% likelihood that C will redeem the voucher and 
will purchase additional products with an undiscounted price of 500.
R allocates the transaction price between the computer and the voucher on a 
relative selling price basis as follows.