Principal and agent in a customer contract
Determine the specified good or service, assess control before transfer and consider the IFRS 15 indicators in the circumstances. A principal normally recognises the gross consideration to which it expects to be entitled; an agent recognises its fee or commission. Legal title or invoicing alone is not conclusive.
Worked example
A platform collects $100 from a customer and is entitled to a $10 commission for arranging a third-party service. If it is an agent and no other adjustments apply, it recognises $10 revenue.
Common mistake
Automatically recognising the full $100 as revenue because it passed through the platform, or deciding solely from who issued the invoice.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |