Specific transactions

In this lesson

1. 0:00 Revenue transactions in IFRS 15
2. 0:38 Principal versus agent classification
3. 1:35 Sales with right of return
4. 2:33 Consignment arrangements explained
5. 3:32 Right of return worked example
6. 5:02 Bill and hold arrangements
7. 6:34 Repurchase agreements substance
8. 8:37 Repurchase agreement worked example

About this lesson

You'll explore principal versus agent arrangements, sales with rights of return, consignment arrangements, bill and hold transactions, and repurchase agreements—all of which require careful analysis of whether control of goods has genuinely transferred to the customer. The lesson covers the core principles that distinguish a principal from an agent: responsibility for fulfilling obligations, inventory risk, and pricing discretion. For sales with rights of return, you'll see how to recognise revenue only for goods expected to be kept, and how to record refund liabilities and recovery assets. Consignment arrangements are explained through the lens of legal ownership versus physical possession—revenue is recognised only when the dealer sells on or the right to return expires. Bill and hold arrangements require you to assess whether control has transferred despite the seller retaining physical possession, using specific criteria around customer request, product identification, and readiness for transfer. The lesson concludes with repurchase agreements, where the substance of the transaction often differs from its form. You'll learn to identify indicators that a transaction is actually a secured loan rather than a sale—such as repurchase prices below expected fair value, the seller's continued use and maintenance of the asset, and the seller bearing the risks and rewards of ownership. Worked examples show how to treat these transactions correctly in your financial statements and calculate finance costs using the effective interest rate method.

Duration: 11m