In which of the following arrangements is there a customer as defined in IFRS 15 Revenue from Contracts with Customers?
Shea Boyd, an up and coming country western singer, buys a pair of black leather boots on deferred payment from B.M. Williams Pty Ltd., an internationally renowned footwear retailer. Shea uses the ‘click and collect’ facility at the on-line check out to arrange to collect the boots at the local B.M. Williams Pty Ltd. store.
In response to a series a negative posts and comments on social media, Vegan Delights Inc., a café selling ethically sourced plant-based meals and beverages to the public, sells all its non-sustainable, non-eco-friendly furniture and equipment to the local Homeless Shelter – at a price sufficient to recover its costs only
Zippy Cars Ltd. designs and manufactures electric cars. Gary, Zippy’s chief engineer, is a cycling enthusiast and in his own recreational time motorizes his bicycle. A post of the motorization, on his personal social media page, goes viral. A start-up company enters into a contract with Gary to buy his motorization plans
Cardiology Ltd. concerned about the increasing rate of heart disease partners with the globally successful company Nutrition Inc. to develop a comprehensive nutrition programme to sell on-line. The vision of the programme is to reduce the risk of heart disease. The two companies agree to share in the profits from the sales.
In the arrangement described for Shea Boyd purchasing black leather boots on deferred payment from B.M. Williams Pty Ltd., Shea Boyd is a customer as defined in IFRS 15 Revenue from Contracts with Customers, as she has entered into a contract with B.M. Williams Pty Ltd. to purchase their product (the boots) and is therefore paying a consideration for goods or services provided by the retailer.
In the Vegan Delights Inc. scenario, the transaction does not involve a customer as defined in IFRS 15, as Vegan Delights is selling its non-sustainable, non-eco-friendly furniture and equipment to the local Homeless Shelter, but this is not a contract for the sale of goods or services in the context of the company's usual business operations.
For the arrangement with Zippy Cars Ltd. and Gary, Gary is not a customer as defined in IFRS 15 because he is not entering into a contract to purchase goods or services; rather, he is selling his motorization plans to a start-up company.
Lastly, in the partnership between Cardiology Ltd. and Nutrition Inc., both companies are collaborating on the development and sale of a nutrition program. In this case, Cardiology Ltd. and Nutrition Inc. are not acting as customers but as collaborative entities engaging in a joint venture, sharing profits from the sales, which falls outside the scope of IFRS 15's definition of a customer.
