Revenue – ifrs 15 handbook

Example 25 – Bill-and-hold arrangement
Company C enters into a contract to sell equipment to Customer D, who is 
awaiting completion of a manufacturing facility and requests that C hold the 
equipment until the manufacturing facility is completed. 
C bills and collects the non-refundable transaction price from D and agrees to 
hold the equipment until D requests delivery. The transaction price includes 
appropriate consideration for C to hold the equipment indefinitely. The 
equipment is complete and segregated from C’s inventory and is ready for 
shipment. C cannot use the equipment or sell it to another customer. D has 
requested that the delivery be delayed, with no specified delivery date.
C concludes that D’s request for the bill-and-hold basis is substantive. It also 
concludes that control of the equipment has transferred to D and that it will 
recognise revenue on a bill-and-hold basis even though D has not specified a 
delivery date. 
The obligation to warehouse the goods on behalf of D represents a separate 
performance obligation. C needs to estimate the stand-alone selling price of 
the warehousing performance obligation based on its estimate of how long the 
warehousing service will be provided. C defers the amount of the transaction 
price allocated to the warehousing obligation and recognises it over time as the 
warehousing services are provided.

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5 Step 5 – Recognise revenue when or as the entity satisfies a performance obligation | 161
5.8 Customer acceptance
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5.8 
Customer acceptance
IFRS 15.38(e)
To determine the point in time at which a customer obtains control for point-in-time 
performance obligations (and therefore the performance obligations are satisfied), 
an entity considers several indicators of the transfer of control, including whether 
the customer has accepted the goods or services.
IFRS 15.B83
The customer acceptance clauses included in some contracts are intended to 
ensure the customer’s satisfaction with the goods or services promised in the 
contract. The table below illustrates examples of customer acceptance clauses.