Arrangements with multiple parties – Identifying the customer can be more challenging when there are multiple parties involved in a transaction. The analysis should include understanding the substance of the relationship of all parties involved in the transaction. Arrangements with multiple parties
Arrangements with three or more parties, particularly if there are separate contracts with each of the parties, require judgment to evaluate the substance of those relationships. Management will need to assess which parties are customers and whether the contracts meet the criteria to be combined when applying the guidance in IFRS 15.
An entity needs to assess whether it is the principal or an agent in an arrangement that involves multiple parties. Has the entity … Read more