This free, guided checker walks your finance team through the key decision points for IFRS 15 Consignment Arrangements. Answer a few questions to see the likely treatment and the evidence to document.
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
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Consignment typically places inventory with a dealer or retailer while the consignor retains risks until the end customer purchase occurs.
No consignment features exist; recognize revenue when control of the goods transfers to the customer under the standard IFRS 15.31 and IFRS 15.38 analysis.
Official guidance: IFRS issued standards
Consignor and consignee apply the same control test but reach different conclusions on inventory and gross versus net revenue presentation.
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Official guidance: IFRS issued standards
Apply the IFRS 15.33 control definition: the ability to direct the use of, and obtain substantially all the remaining benefits from, the goods. In consignment the consignor retains control until a specified event such as the end-customer sale (IFRS 15.B78(a)). Weigh legal title, physical possession, payment obligations, and return rights together; possession by the dealer alone does not demonstrate control.
If the dealer obtains control at delivery, the consignor recognizes revenue at that point in time under IFRS 15.38, subject to any right-of-return constraint (IFRS 15.B21).
Official guidance: IFRS issued standards
Right of return and lack of consignee obligation to pay for unsold units support consignor retention of control until end-customer sale.
Without a substantive return or redirection right, the IFRS 15.B78(b) indicator fails; account for the delivery as a sale with revenue recognized at transfer of control (IFRS 15.38).
Official guidance: IFRS issued standards
Consignees that bear obsolescence, theft, or damage risk on unsold goods may have obtained control before end-customer sale.
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Official guidance: IFRS issued standards
Pricing discretion combined with inventory risk may indicate the consignee controls goods before resale to end customers.
Inventory risk combined with pricing discretion indicates the dealer may control the goods before resale; reassess the principal conclusion for both parties under IFRS 15.B34A-B37.
Official guidance: IFRS issued standards
The consignor controls the specified good before transfer to the end customer and is typically the principal recognizing gross revenue at the end-customer sale.
A consignor that does not control the specified goods before transfer is an agent and recognizes as revenue only the fee or commission for arranging the sale (IFRS 15.B36).
Official guidance: IFRS issued standards
Consignees that do not control the specified good before transfer present net commission revenue and do not recognize consigned inventory on balance sheet.
A consignee claiming principal status must demonstrate control of the goods before transfer under IFRS 15.B34A-B35; gross presentation without control evidence overstates revenue.
Official guidance: IFRS issued standards
Consignors retain inventory until control transfers at end-customer sale and recognize revenue at that point on a gross basis as principal.
Defer revenue until the end-customer sale is evidenced by reliable sell-through reporting; control has not transferred at delivery to the consignee (IFRS 15.38; IFRS 15.B77).
Official guidance: IFRS issued standards
Consignees acting as agents do not recognize consignor inventory and may disclose consignment arrangements in the notes only.
Remove consigned goods from the consignee's inventory when the agent conclusion applies; the consignee does not control the goods and has no inventory asset (IAS 2.6).
Official guidance: IFRS issued standards
Consignors continue to carry consigned inventory at their cost until control transfers at the end-customer transaction.
Restore prematurely derecognized consigned goods to consignor inventory; control has not transferred, and derecognition before sell-through misstates both inventory and revenue (IFRS 15.B77).
Official guidance: IFRS issued standards
Disclose significant judgments on gross versus net presentation and consignment inventory arrangements when material to users.
Consignment accounting is supportable: recognize revenue on sell-through, retain consignor inventory until that point, and include the IFRS 15.119(a) and IFRS 15.123 disclosures. Complete the IFRS 15.119(a) timing disclosure and the IFRS 15.123 significant-judgement disclosure before finalizing the consignment accounting.
Official guidance: IFRS issued standards
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