Revenue – ifrs 15 handbook

3 
Step 3 – Determine the transaction price
Transaction price may include amounts not paid by the customer ................................................................................... 47
Transaction price may include fair value of derivative on settlement date ........................................................................ 47
3.1 Variable consideration (and the constraint)
Consideration can be deemed to be variable even if the price stated in the contract is fixed ........................................... 49
A fixed rate per unit of output may be variable consideration .......................................................................................... 49
Quantity subject to confirmation after delivery is variable consideration ......................................................................... 50
Provisional pricing based on market price of commodity ................................................................................................. 50
Variable consideration or optional purchases ................................................................................................................... 50
Volume discounts or rebates may be variable consideration or may convey a material right ............................................ 51
A transaction price denominated in a foreign currency does not constitute variable consideration .................................. 51
Liquidated damages may represent variable consideration or a product warranty ........................................................... 52
All facts and circumstances are considered when selecting estimation method ............................................................. 53
Expected value method – No need to quantify less probable outcomes.......................................................................... 54
Expected value method – Estimated amount does not need to be a possible outcome for an individual contract ........... 54
Historical experience may be a source of evidence ......................................................................................................... 55
A combination of methods may be appropriate ............................................................................................................... 55
Constraint assessment made against cumulative revenue ............................................................................................. 60
Specified level of confidence included in constraint requirements .................................................................................. 60
Constraint introduces an element of prudence................................................................................................................ 60