How to Recognise Revenue in Multi Component Sales under IAS 18

What is a Multi-component Sale?

So far we’ve looked at revenue from the viewpoint of selling one good or one service at a time.

However, often goods or services can be packaged together for sale in one deal.

Examples of this include the sale of:

  • A washing machine sold with an additional extended warranty
  • A television service sold with telephone and broadband

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Introduction to IAS 18 Revenue


Revenue is the name given to an entity’s income that arises in the ordinary course of activities and is known by a number of other names including:

  1. Sales
  2. Fees
  3. Interest
  4. Dividends
  5. Royalties
  6. Rent

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Revenue Recognition for under IAS 18

What is Revenue?

Revenue is the gross inflow of economic benefits (cash, receivables, other assets) arising from the ordinary operating activities of an enterprise (such as sales of goods, sales of services, interest, royalties, and dividends).

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