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Version date: 26 February 2020 - onwards
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Contingent revenue cap and the portfolio approach to allocation (paras. BC287-BC293)

BC287 Some respondents disagreed with the boards' proposal that the transaction price should be allocated on a relative stand-alone selling price basis. Those respondents (primarily from the telecommunications and cable television industries) disagreed because allocating the transaction price using relative stand-alone selling prices on a contract-by-contract basis could be complex and costly for their industries. This is because entities in those industries:

(a) have a high volume of contracts with various potential configurations;

(b) provide multiple goods and services in those contracts;

(c) include a discount in the contracts; and

(d) provide the goods or services at different times.

BC288 Those respondents also disagreed with allocating the transaction price on the basis of relative stand-alone selling prices because it would provide a revenue recognition pattern that they considered would not be useful to users of their financial statements.

BC289 Those respondents requested tha

Comparing proposed amendment...