Under some contracts, entities provide the customer with the right to future purchases of additional tech products or services for an amount below fair value.
Under IFRS 15, such options are separate performance obligations if they provide a material right to the customer that it would not receive without entering into that contract. For example, it may convey a material right if the discount exceeds the range of discounts typically given for those goods or services to that class of customer in that geographical area or market. If an option is a separate performance obligation, a portion of the transaction price is allocated to the option (see Allocation of transaction price to performance obligations). The allocated amount will be … Read more