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Bill-and-hold arrangement

Revenue can be recognised before physical delivery only if the customer has obtained control and the specific IFRS 15 bill-and-hold criteria are met. These include a substantive reason for the arrangement, separate identification of the product, readiness for physical transfer, and the seller’s inability to use or redirect it to another customer. Consider whether custodial services are a separate performance obligation.

Worked example

A customer requests delayed delivery for lack of storage. The completed goods are identified as that customer’s, ready for delivery and cannot be redirected. If all other control and bill-and-hold requirements are met, revenue may be recognised before physical delivery.

Common mistake

Recognising revenue solely because an invoice has been issued while the seller can still substitute or redirect the goods.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA FR Direct September 2026–June 2027
ACCA SBR Direct September 2026–June 2027