There are 2 performance obligation:

Chapter 2: Premium 1. To deliver the goods sold

Liability 2. To satisfy the option for coupons
for free product, rebate, or
discount.
PREMIUMS
Allocation of transaction price
Premiums are articles of value such as
toys, dishes, silverware, and other goods FREE PRODUCT
given to customers as result of past sales or
promotional activities.
No. of free additional products XXX
Entities offer premiums to customers in
return for any proof of purchase, such as Multiply by actual selling price XXX
product labels, box tops, wrappers, bottle
caps, and coupons. (Proof of purchase) Selling price of free products XXX
When the merchandise is sold, a
constructive obligation for the future Expected redemption XXX
distribution of premium arises and should be
given accounting recognition, accordingly, a Stand-alone selling price of the XXX
constructive accounting liability arises coupons
because of the promise to provide an
article of value.
DISCOUNT COUPONS
FREE PRODUCT, DISCOUNT, AND
REBATE
Average price of future purchase XXX
In a contract of sale of goods, an entity
may offer customer incentives such as Multiply by no. of discount XXX
free product, discount coupons, and coupons
rebate coupons with the end in view of
stimulating sales. Total amount of the future XXX
purchases
IFRS 15, Paragraph 22, provides that
contract establishment an entity shall Multiply by percentage of XXX%
assess the goods promised in a contract discount
with customer and shall identify as a
performance obligation each promise to Total discount on future XXX
transfer to the customer either: purchases

a. Distinct good Expected redemption XXX%

b. Series of distinct goods,
substantially the same and have the Stand-alone selling price of XXX
same pattern transfer to the coupons
customer

Under B40, the option to purchase of the

customer arises an performance
obligation to satisfy the customer.
 (5,000,000 x 10%)
REBATE COUPONS Expected value of 4,500,000
certificates to be
Number of products sold XXX redeemed
(5,000,000 x 90%)
Multiply by discount per coupon XXX Value of certificates 1,800,000
Total amount of discount XXX
Breakage revenue
Expected redemption XXX 200,000
(1,800/4,500, x
% 500,000)
Stand-alone selling price of rebate XXX
coupon

For example only: all allocation method

are same as other method

Stand-alone Fraction Allocated

PS 500,000 500/720 347,222

C 220,000 220/720 152,777

720,000 500,000

GIFT CERTIFICATE

Seller shall recognize revenue from

breakage based on the value of
certificates redeemed in proportion to
the expected value of certificates to be
redeemed.

Example:

Sold gift certificate 5,000,000

Deemed not redeemable 10%

Redeemed gift certificates 1,800,000

Expected value of 500,000

breakage