Accounting · IFRS 15 Revenue from Contracts with Customers
A company, 'Mediator', connects clients with service providers. Mediator determines the price the client pays, but the service provider is solely responsible for fulfilling the service, and Mediator bears no inventory risk. Mediator earns a 10% commission on the total transaction price. Under IFRS 15, how should Mediator recognize revenue?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Revenue is recognized at the gross transaction price, with the service provider's share as Cost of Sales.
- 2Revenue is recognized as the 10% commission, because Mediator acts as an agent.✓
- 3Revenue is recognized at the gross transaction price, because Mediator sets the pricing structure.
- 4Revenue is split equally between gross transaction value and commission income.
Correct answer
Revenue is recognized as the 10% commission, because Mediator acts as an agent.
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