Revenue – ifrs 15 handbook

Estimate of the likelihood of exercise of an option is not revised
IFRS 15.88
When determining the stand-alone selling price of a customer option for 
additional goods or services, an entity estimates the likelihood that the 
customer will exercise the option. This initial estimate is not subsequently 
revised because it is an input into the estimate of the stand-alone selling price 
of the option. Under the standard, an entity does not reallocate the transaction 
price to reflect changes in stand-alone selling prices after contract inception. 
The customer’s decision to exercise the option or allow the option to expire 
affects the timing of recognition of the amount allocated to the option, but it 
does not result in reallocation of the transaction price.
Estimating the stand-alone selling price of ‘free’ gift cards and 
coupons
IFRS 15.42
In some cases, an entity may sell gift cards or coupons in stand-alone 
transactions with customers. In addition, the entity may grant gift cards 
or coupons in the same denomination in transactions in which customers 
purchase other goods and services. In the latter case, the gift cards or coupons 
may be identified as conveying a material right to the customer – e.g. an 
entity offers a free gift card or coupon with a value of 15 with every 100 of 
goods purchased. 
In these cases, the stand-alone selling price of the gift card or coupon identified 
as a material right may differ from the stand-alone selling price of a separately 
sold gift card or coupon. This is because customers who receive the gift card or 
coupon as a material right may be significantly less likely to redeem them than 
customers who purchase a gift card or coupon in a separate transaction.
Therefore, an entity may conclude that there is no directly observable stand-
alone selling price for a free gift card or coupon provided to a customer in 
connection with the purchase of another good or service. In this case, the entity 
estimates the stand-alone selling price using the guidance in Step 4 of the 
model (see 
Chapter 4
).