BESP for Discounts
The right to a discount on future purchases of goods and services by the customer, if incremental to other discounts offered to regular customers or significant in relation to the overall consideration transferred, qualifies as a separate unit of accounting. Accounting guidance indicates that the preferred methodology when allocating consideration to the separate units of accounting in a multiple-element arrangement would be the BESP. The following example illustrates the accounting for such an arrangement.
A seller enters into an arrangement with a buyer to sell Product X and Service Y for a consideration of $150,000. In addition, the seller offers the buyer a $25,000 discount on product Z with the offer good for ...