Skip to content

ACCA Strategic Professional · Strategic Business Reporting (International) · Revenue

Delta Co sells goods to a customer under a bill-and-hold arrangement at the customer's request. The goods are identified separately as belonging to the customer, are ready for physical transfer, and cannot be used by Delta or directed to another customer. Which statement is correct under IFRS 15?

Delta may recognise revenue at the point control passes, even though the goods stay in its warehouse, because the bill-and-hold criteria are met. Physical possession is only an indicator of control under IFRS 15, and the goods are identified as the customer's and cannot be redirected.

  1. ADelta may recognise revenue when control passes, provided the bill-and-hold criteria are met, even though the goods remain in Delta's warehouseCorrect
  2. BDelta must defer revenue until the goods are physically delivered to the customer
  3. CDelta should recognise revenue over time as the goods are stored
  4. DDelta should recognise revenue only when the customer pays in full

Explanation

For bill-and-hold, IFRS 15 allows revenue when control transfers if the reason is substantive, the goods are separately identified as the customer's, ready for transfer, and cannot be used or redirected. Physical possession is only an indicator of control, not a requirement. Storage is a separate service to consider.

Did you get it right without looking?

One question tells you little. A timed set on Revenue shows your real accuracy, how long you take and where you lose marks.

Practise RevenueFree diagnostic mock

More Revenue questions