CERTYNEX IFRS ACADEMY

Ventoux Cycles delivers 40 electric bikes to an independent retailer. The retailer only pays for a bike after selling it to an end customer; Ventoux can at any time recall unsold bikes to send them to another shop, and the retailer can return unsold bikes after six months. The retailer pays a flat security deposit. How does Ventoux treat the delivery to the retailer?

Revenue on the 40 bikes on delivery, since the retailer has the bikes in its shop and has paid a deposit.

Revenue on delivery, reduced by a refund liability for expected returns.

No revenue on delivery: the bikes remain Ventoux's until control transfers, for example on their sale to the end customer.

Revenue equal to the deposit received, the balance on sale to the end customer.