Revenue – ifrs 15 handbook

Coupons issued at the point of sale
Retail stores often print coupons at the register after a purchase is completed 
(sometimes referred to as ‘Catalina coupons’ or ‘bounce-back coupons’ that 
can be redeemed for a short period of time). The coupons are handed to 
customers at the point of sale or packaged with the goods that customers have 
contracted to purchase. Often, customers are not aware that they will receive 
these coupons. 

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10 Other application issues | 269
10.4 Customer options for additional goods or services
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Customers can often access similar discounts without making a purchase – e.g. 
if coupons are printed in a newspaper or freely available in-store or online. This 
type of general marketing offer may indicate that the coupon does not provide a 
material right because the discount is available to the customer independently 
of a prior purchase. As a result, the coupons are often recognised as a reduction 
in revenue on redemption. 
Conversely, if there is no general marketing offer then the entity assesses 
whether the coupon conveys a material right. This assessment includes 
consideration of the likelihood of redemption, which will often be low and 
therefore reduces the likelihood that the coupon will be identified as a 
material right.
Volume discounts and rebates
Prospective volume discounts (or rebates) that are earned once a customer 
has completed a specified volume of optional purchases are evaluated for the 
presence of a material right and do not give rise to variable consideration.
To evaluate whether an option represents a material right, an entity evaluates 
whether a similar class of customer could receive the discount independently 
of a contract with the entity. This analysis involves comparing the discount in the 
current transaction with discounts provided to similar customers in transactions 
that were not dependent on prior purchases – i.e. discounts not offered through 
options embedded in similar contracts with other customers. The fact that 
discounts given to similar customers in stand-alone transactions are similar to 
the discount offered in the current contract indicates that the customer could 
obtain the discount without entering into the current contract.
For example, a prospective rebate arrangement would not give rise to a material 
right if the discounted price after the threshold is consistent with the unit price 
offered to other customers that are expected to make purchases at or above 
the volume target. However, if other customers can receive the discounted 
price only through a prospective rebate arrangement then this suggests that 
all customers receive future discounts as a result of prior purchases. In these 
cases, a prospective rebate arrangement may give rise to a material right.