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Hi!

I have two questions relating to revenue and expense netting.

(1) Revenue Sharing - We have an agreement with a a partner brand wherein they share a certain % for revenues we earn on their product brand with us. For financial reporting, can we offset/net their revenue share against the income we recognized? I

(2) Expense Sharing - We are paying our partner brands for marketing fees. As part of the contract with them, our entity is entitled to receive bounty fees / marketing funding based on a usage of the product with their branding. For financial reporting, can we offset/net the amount we receive against the expense we recognized?

Hope you could help

1. You need to determine whether you're an agent or a principal:

https://ifrscommunity.com/knowledge-bas ... ss-vs-net/

2. You need to be careful here, it may be the case that you *must* offset the revenue. It largely depends on whether you're receiving a distinct marketing services or not. Read this section:
https://ifrscommunity.com/knowledge-bas ... a-customer

Sorry Marek, for the point 2, I can't understand your point.

The question was about how to treat the marketing funding by the partner, as a revenue or in reduction of marketing expenses. It would've been applicable if the company is the one who pays.

maybe it's not clear, I understood that they are paying some marketing fees to their customer

Hi Leo, Marek,

On the 2nd point - Leo is correct, the main question is how to treat the marketing funding by the partner/vendor, as a revenue or in reduction of marketing expenses.

I see, so this section applies:

https://ifrscommunity.com/knowledge-bas ... e-customer