Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 15: Agent principal relationship identification
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- September 19, 2018 at 1:03 pm #475223
Hi
Good afternoon!!
I have a question on agent and principal relation identification under new IFRS 15. For example,
Parent Company-Company A has an agreement with Company B (Subsidiary Company) under which Company B has to provide services to Company A. Company A is situated in Netherland whereas Company B is situated in Bangladesh. Company B provides maintenance services to Company A’s customers in Bangladesh. Company B does not have any contract or agreement with Company A’s customer. If any spare parts are required for giving services to Company A’s customer, then Company A provides the spare parts. Company B is given cost + 15% mark up for providing services to company A’s customer by Company A.
Please help me to understand, whether Company B is acting as an agent of Company A or not.
Thanks!
Nayeem
September 23, 2018 at 9:16 pm #475597Hi,
You need to start with the fundamental rules in IFRS 15 and apply those. Have an attempt and let me know what you think and then I can help from there.
Thanks
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