Discount code

[Tan Chun Huat]

Hi,

If I am the agent in a principal agent relationship, and the principal sells products on my e-commerce platform, how should I recognise my revenue if discount to products are provided by my platform?

Can I recognise it on a net basis or I have to recognise it as an expense?

 

[SSM0011]

So who is providing the discount...out of whose pocket is the discount coming from? Give an example.

 

[Tan Chun Huat]

So who is providing the discount...out of whose pocket is the discount coming from? Give an example.

Hi,

The discount is coming from my pocket (agent).

Example, principal selling item at $100. Customer applies a promo code of $10 off from selling price. So net amount paid is $90.

As I am earning a 30% commission from the item price ($100), which amounts to $30 commission revenue, how will the promo code of $10 be recognised?

Separately or as a net revenue, I.e. $20 under revenue line?