Revenue – ifrs 15 handbook

10.3.2 
Control assessment
Goods or
services
Goods or
services
Obtains
control
Does not
obtain control
Supplier
Intermediary
End customer
Principal
Agent
IFRS 15.B35
If an entity obtains control of a good or a right to services in advance of transferring 
those goods or services to the customer, then the entity is a principal. Otherwise, it 
is an agent.

---

© 2019 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
10 Other application issues | 247
10.3 Principal vs agent considerations
| 
IFRS 15.33
‘Control’ is the ability to direct the use of, and obtain substantially all of the 
remaining benefits from, the goods or services (or prevent others from doing so).
IFRS 15.B35A
When another party is involved, an entity that is a principal obtains control of:
– a good from another party that it then transfers to the customer;
– a right to a service that will be performed by another party, which gives the entity 
the ability to direct that party to provide the service on the entity’s behalf; or
– a good or a service from another party that it combines with other goods or 
services to produce the specified good or service promised to the customer.
IFRS 15.B77–B78, B81
To determine whether it controls a specified good or service before it is transferred 
to the customer, the entity acting as an intermediary applies the general guidance 
on transfer of control (see 
Section 5.4
).
IFRS 15.B34A, B37
If the assessment based on the general guidance on transfer of control is not 
conclusive, then an entity also considers the specific indicators of whether it acts as 
a principal. These indicators include, but are not limited to, the following.