How do you account for Revenue under IFRS 15 when a transaction is not commercially viable

Question

For example, a company grants a subsidiary revenue such that it's P&L has a 0 balance at year end. The revenue granted in exchange for the subsidiary's service is significantly below market rate. The transaction does not therefore have commercial substance per requirement 1. of IFRS 15.

Is the revenue recognised at all? If so, how is it recognised?

Comments

"For example, a company grants a subsidiary revenue such that it's P&L has a 0 balance at year end. " I am not clear what this means? can you explain?

Answer 1

I too can't understand fully the commercial value associated with that sales transaction .
Is there simply a routing of a revenue element of a commercial agreement ?
If so then are there any associated costs treated the same way i.e. Billed to that subsidiary ?

Are there any other costs charged to subsidiary to bring its *** profit down to zero ?

Are these transactions tested for compliance with transfer pricing rules ?
Many unanswered questions