Revenue – ifrs 15 handbook

Determine stand-alone selling prices
Use the observable price
Estimate price
Is
observable price available?
an
Yes
No
The standard does not contain a reliability threshold
Under the standard, the stand-alone selling price is determined at contract 
inception for each performance obligation. There are no circumstances in which 
revenue recognition is postponed because it is difficult to determine a stand-
alone selling price. 
If an observable price is available, then it is used to determine the stand-alone 
selling price; if not, then the entity is required to estimate the amount. 
The standard does not require that the amount can be ‘reliably’ estimated, nor 
does it prescribe another threshold. An entity is required to maximise the use 
of observable inputs, but in all circumstances will need to arrive at a stand-alone 
selling price and allocate the transaction price to each performance obligation in 
the contract. 
An entity will need to apply judgement when there are observable prices but 
they are highly variable.

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92 | Revenue – IFRS 15 handbook
4.1.1 
Estimating stand-alone selling prices
IFRS 15.78
An entity considers all information that is reasonably available when estimating 
a stand-alone selling price – e.g. market conditions, entity-specific factors and 
information about the customer or class of customer. It also maximises the use of 
observable inputs and applies consistent methods to estimate the stand-alone selling 
price of other goods or services with similar characteristics. 
IFRS 15.79
The standard does not preclude or prescribe any particular method for estimating 
the stand-alone selling price for a good or service when observable prices are not 
available, but describes the following estimation methods as possible approaches.