Revenue – ifrs 15 handbook

Is the consideration variable or fixed?
Variable
Fixed
Estimate the amount using the expected
value or most likely amount see 3.1
(
.1)
Apply the
– i.e. determine the portion, if
constraint
any, of that amount for which it is highly probable
that a significant revenue reversal will not
subsequently occur (see 3.1.2)
IFRS 15.55
An entity recognises a refund liability for consideration received or receivable if it 
expects to refund some or all of the consideration to the customer. 
The standard applies the mechanics of estimating variable consideration in a variety 
of scenarios, some of which include fixed consideration – e.g. sales with a right 
of return (see 
Section 10.1
) and customers’ unexercised rights (breakage) (see 
Section 10.5
).
Example 1 – Enterprise service contract with usage fee treated as 
variable consideration
IFRS 15.22(b), 23
Telco T enters into a contract with Customer C to provide call centre services. 
These services include providing dedicated infrastructure and staff to stand 
ready to answer calls. T receives consideration of 0.50 per minute for each call 
answered. 
T observes that C does not make separate purchasing decisions every time 
a user places a call to the centre and that the nature of the services provided 
to C is substantially the same in each case. Therefore, T concludes that its 
performance obligation is the overall service of standing ready to provide call 
centre services, rather than each call answered being the promised deliverable. 
It therefore concludes that the per-minute fee is variable consideration.

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3 Step 3 – Determine the transaction price | 49
3.1 Variable consideration (and the constraint)
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