Key takeaway
Identify the promise and control before transfer. Cash passing through an intermediary does not, by itself, choose gross revenue or fee presentation.
Draw the cash before naming the revenue
A finance report shows USD 100,000 collected from a customer and USD 95,000 paid onward to a supplier. The company kept USD 5,000 before its other costs. That diagram explains cash movements. It cannot alone establish whether the company’s revenue is the full customer amount or a fee for arranging another party’s supply.
A role label cannot settle the assessment either. Broker, reseller or marketplace can describe commercial activity while leaving the promised goods or services and the entity’s control unclear. The company needs an accountant-facing description of the actual arrangement, not a preferred top-line number.
Two conditional presentation columns
Hypothetical example: a fictional intermediary participates in one licensed-information transaction. The customer pays USD 100,000 and the intermediary remits USD 95,000 only when the transaction completes. Before the possible transaction it spends USD 600 on engineering and USD 400 on outside review. All amounts and relationships are invented; no VOID transaction or compensation rate is described.
Assume all cash events occur within one illustrative period. To isolate presentation, each column below separately stipulates the applicable classification and expense timing. Those premises have not been established for a real entity. The columns are teaching alternatives, not options a company can select to improve its reported revenue.
| Illustrative item | Assumed agent presentation | Assumed principal presentation |
|---|---|---|
| Customer cash passing through | USD 100,000 | USD 100,000 |
| Assumed revenue for the specified promise | USD 5,000 fee | USD 100,000 |
| USD 95,000 supplier amount | Pass-through remittance in this assumption | Corresponding expense in this assumption |
| Cash retained before other costs | USD 5,000 | USD 5,000 |
| Cash after entered USD 1,000 preparation | USD 4,000 | USD 4,000 |
Find the specified promise and control evidence
The IFRS Interpretations Committee’s software-reseller agenda decision explains a framework: identify the specified goods or services and assess control before they reach the customer. Its page concerns an April 2022 meeting but expressly states that the agenda decision was published in May 2022. The fact pattern involves standard software licenses and several contracts, not an automatic result for every intermediary.
The IASB’s June 2023 Request for Information summarizes the distinction as principal gross revenue versus agent fee/commission revenue. Its background also explains that indicators support the control assessment. This is explanatory material in a review document, not a new standard or the full current normative IFRS 15 text.
Prepare the customer promise, supplier agreement, rights transferred, responsibility for fulfillment, rejection or return exposure and pricing facts for the accountant. Pricing discretion is one indicator; it is not a complete substitute for control. Who collects the money or sends the invoice may be relevant context without proving the answer.
The retained USD 5,000 is not an accounting conclusion
The arithmetic is simple: USD 100,000 minus USD 95,000 leaves USD 5,000; subtracting the entered USD 1,000 preparation leaves USD 4,000 cash. Under the separately stipulated agent column, the USD 95,000 is not added to both revenue and expense merely because it passed through. Under the stipulated principal column, the example assumes the corresponding supplier cost is expensed in that period.
Actual recognition timing, capitalization, contract balances, taxes and disclosures remain open. The earlier cash-and-revenue schedule explains why performance and cash dates can differ. Neither this cash remainder nor the hypothetical table establishes recognized profit, and no applicable accounting framework has been selected for an actual company.
If no transaction occurs after the USD 1,000 preparation, assume no customer receipt and no supplier remittance. The example’s no-deal cash result is negative USD 1,000. No other external fee, ongoing service, financing cost or probability is entered. That downside does not decide principal-versus-agent classification; it keeps the commercial cash case honest.
Write the missing judgment as a question
A useful brief says which promise needs classification, identifies the contracts and facts supporting each possible control indicator, and records what remains unknown. If the intermediary has separate promises, the accountant may need to examine each rather than applying one role label across the business. Do not alter the description of the actual duties to obtain the more attractive revenue figure.
The public agenda decision and review background were actually read, but the full current standard and a real transaction’s documentation were not. A qualified accountant should determine the applicable framework, presentation, timing and disclosures. The article supplies an evidence agenda and conditional illustration, not that professional conclusion.
Keep the fictional intermediary separate from VOID
VOID’s current role is a permissioned introduction and coordinated handoff, with no upfront seller referral fee and possible disclosed conditional receiving-program compensation. It does not take the owner’s license proceeds through the USD 100,000 cash flow illustrated here. The example changes no service arrangement and establishes no paid outcome.
The finance owner can now present the USD 4,000 cash remainder alongside the unresolved control question. That pairing is more informative than treating money received on behalf of another party as an automatic increase in the company’s own revenue.