A principal recognises revenue gross, while an agent recognises only its commission or net amount. Marketplaces, agencies and dealer arrangements are where this judgement matters most, as gross reporting can inflate revenue.
Source: TFRS 15
Related terms
Revenue from contracts with customers (TFRS 15)The standard requiring revenue to be recognised to depict the transfer of goods or services to customers, at the amount the entity expects to be entitled to.RevenueIncome arising in the course of an entity's ordinary activities.Performance obligationA promise in a contract with a customer to transfer a distinct good or service.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: November 8, 2026 · This definition is for general information only.