Revenue – ifrs 15 handbook

Variable consideration (and the
constraint) (see Section 3.1)
An entity estimates the amount of
variable consideration to which it
expects to be entitled, giving
consideration to the risk of revenue
reversal in making the estimate
Non-cash consideration
(see
.3)
Section 3
Non-cash consideration is measured
at fair value, if that can be reasonably
estimated; if not, then an entity uses
stand-alone selling price of the
the
or service that was promised in
good
exchange for non-cash consideration
Significant financing
component (see
.2)
Section 3
For contracts with a significant
financing component, an entity adjusts
the promised amount of consideration
to reflect the time value of money
Consideration payable to
a customer (see
4)
Section 3.
An entity needs to determine
whether consideration payable to
a customer represents a reduction of
the transaction price, a payment for a
distinct good or service, or a
combination of the two
Transaction
price

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3 Step 3 – Determine the transaction price | 47
3.1 Variable consideration (and the constraint)
| 
IFRS 15.9(e), 60
Customer credit risk is not considered when determining the amount to which an 
entity expects to be entitled – instead, credit risk is considered when assessing 
the existence of a contract (see 
Chapter 1
). However, if the contract includes 
a significant financing component provided to the customer, then the entity 
considers credit risk in determining the appropriate discount rate to use (see 
Section 3.2
).
IFRS 15.58, B63
There is an exception to the variable consideration guidance for sales- or usage-
based
 
royalties arising from licences of intellectual property (IP) (see 
Section 9.6
).