Revenue – ifrs 15 handbook

10.3 Principal vs agent considerations
Unit of account is the specific good or service .............................................................................................................. 246
The specified good or service may be a right ................................................................................................................. 246
Principal-agent indicators support application of the general control principle, but cannot override it ............................ 249
Certain conditions may help with control determination ............................................................................................... 250
No individual indicator is generally determinative .......................................................................................................... 250
Providing a significant integration service is determinative ........................................................................................... 251
Entity obtains only flash title before transfer to the customer ....................................................................................... 251
Entity may still be principal for tangible asset even if it does not take physical possession ............................................ 251
No specific guidance on allocating a discount when an entity is a principal for part of the arrangement and an
agent for the other part ................................................................................................................................................. 260
Estimating gross revenue as a principal ......................................................................................................................... 260
10.4 Customer options for additional goods or services
Determining whether a material right exists requires an evaluation of both quantitative and qualitative factors ............ 266
Customers’ options that provide accumulating rights are assessed in aggregate ......................................................... 267

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Index of KPMG insights | 361
Exercise of a material right ............................................................................................................................................ 267
Estimate of the likelihood of exercise of an option is not revised ................................................................................... 268
Estimating the stand-alone selling price of ‘free’ gift cards and coupons ....................................................................... 268
Coupons issued at the point of sale ............................................................................................................................... 268
Volume discounts and rebates ...................................................................................................................................... 269
Evaluating optional purchases at a discount compared with the original contract .......................................................... 269
A cancellable contract may contain a material right ....................................................................................................... 270
Alternative approach not limited to renewal options ...................................................................................................... 275
More than one acceptable approach to determine the expected goods or services to be provided ............................... 276
No significant financing component in most customer loyalty programmes ................................................................. 281
Cancellable customer loyalty programmes may be implicit performance obligations .................................................... 281
Treatment of customer credit card arrangements ......................................................................................................... 281
Residual approach generally not appropriate for determining stand-alone selling price of loyalty points ........................ 282
Amounts payable to third party loyalty programme operators ...................................................................................... 285