Accounting for Coupon Redeemable for Free Products from a 3rd Party Under Ind AS 115

In certain contractual arrangements involving third parties delivering goods or services to the entity’s customers, it becomes imperative for the entity to discern whether its performance obligation is directly providing goods/services or merely facilitating their provision by another party. This evaluation determines whether the entity acts as a principal or agent.

Ind AS 115, Revenue from Contracts with Customers, specifies distinct accounting treatments contingent upon whether the entity assumes the role of an agent or principal.

A similar scenario arises in case vouchers/coupons are issued by the entity to customers upon meeting specific criteria. The appropriate accounting approach for such scenarios is elucidated in the linked story below for your reference.

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