Ch. 18 – IFRS NEWS Podcast (March 2026)
Listen to podcast Chapter 18 – March 2026
In accounting, small nuances in initial recognition can lead to significant differences in how a company presents its revenue, accounts receivable, and contractual obligations. One such case arises when a commercial transaction incorporates volume discounts, as the initial value of the account receivable does not necessarily match the nominal sale price. According to the content discussed in this IFRS News, the assessment must consider the provisions of IFRS 9 and the application of IFRS 15 to correctly determine the amount to be recognized from the outset.
This topic becomes particularly relevant when the entity concludes that the customer will likely reach the threshold that entitles them to the discount. In that scenario, the transaction price must be estimated by reducing said discount from the first shipment, and additionally, a contract liability must be recognized for the equivalent of the expected rebate. More than a technical adjustment, this is a key accounting decision to more accurately reflect the economic reality of the transaction and avoid distortions in the initial measurement of trade receivables.
Accounting news
Transaction price
In accordance with IFRS 9, at the time of initial recognition, trade receivables are measured at.
Considering that a trade receivable can be measured at initial recognition for an amount different from the transaction price, such as in a sale with a volume discount, IFRS 9 replaced the term “transaction price” with the phrase "the amount determined by applying IFRS 15.".
Accounting inquiries
B. How is the transaction price determined in a sale with a volume discount?
If the entity concludes that the customer will reach the threshold to be entitled to the purchase volume discount, it will estimate the transaction price by reducing the purchase volume discount from the product price, starting from the first shipment.
Additionally, for the equivalent of the discount, a contract liability is recognized for the reimbursement.
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