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What is a multiple‐element transaction? Can anyone explain with some practical examples and tell how IAS 18 applies to such transactions?
in IAS 18 - Revenue by Level 1 Member (1.2k points)
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Generally a transactions involving a sale of goods or services give rise to revenue recognition where by you credit revenue and debit cash/debtors. However when transactions warrant more elements / entries such transactions are considered to be multiple element transactions. Here are some examples

1. Sale of a car with two-year free service - in this case cost of such services are deferred and recognized in the periods which they actually arise.

2. Customer loyalty programs for instance a retail chain may give a credit for each $1000 a customer spends & one credit equals one dollar. Consumers can use these credits to purchase items from the retail shop once such points reach 100.