Revenue – ifrs 15 handbook

Example 3 – Zero residual amount after applying other accounting 
requirements
IFRS 9.B5.4.3
Bank B enters into a contract with a customer in which it receives a cash 
deposit and provides associated deposit services and treasury services for 
no additional charge. The cash deposit is a liability in the scope of the financial 
instruments standard. B first applies the initial recognition and measurement 
requirements in the financial instruments standard to measure the cash 
deposit. B then allocates the residual amount to the associated deposit services 
and treasury services and accounts for it under the revenue standard. Because 
the amount received for the cash deposit is recognised as a deposit liability, 
there are no remaining amounts to allocate to the associated deposit services 
and treasury services.
Modifying the fact pattern, if the arrangement included a periodic service fee, 
then a similar analysis would be performed. However, depending on the facts 
and circumstances, all or part of an ongoing fee that is charged on a monthly or 
annual basis is likely to be in the scope of the revenue standard.
Example 4 – Collaborative agreement
Biotech X has an arrangement with Pharma Y to research, develop and 
commercialise a drug candidate. X is responsible for the research and 
development (R&D) activities and Y is responsible for the commercialisation of 
the drug candidate. Both X and Y agree to participate equally in the results of the 
R&D and commercialisation activities. 
Because the parties are active participants and share in the risks and rewards of 
the end product – i.e. the drug – this is a collaborative arrangement. However, 
there may be a revenue contract within the overall collaborative arrangement.
In some cases, there will be little or no residual amount 
remaining to allocate
For some arrangements, as illustrated in Example 3 in this chapter, 
after applying the other accounting guidance on separation and/or initial 
measurement, there may be little or no amount left to allocate to components 
of the contract that are in the scope of the revenue standard.

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168 | Revenue – IFRS 15 handbook