Gross vs Net Revenue Principal-vs-Agent
Whether you report the full amount the customer paid, or only the slice your company actually keeps.
The fork, why two teams get different numbers
Marketplaces, ad networks, travel resellers, and delivery apps split on
principal-vs-agent. A principal reports the gross amount billed to the end
customer; an agent reports only the commission or margin retained. Ride-share
and food-delivery finance teams have flipped between the two across restatements.
A "GMV/take-rate" operator reports net revenue while its board deck quotes gross
merchandise value, so the same company has two "revenue" numbers an order of
magnitude apart, both defensible under ASC 606-10-55-36 through 55-40.
The trap
A "revenue" figure that quietly switched from gross to net (or vice versa) during a policy change shows a cliff in year-over-year growth that is pure presentation, not business decline.
- The full trap, worked on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: FASB ASC 606-10-55 (Principal vs Agent) · IFRS 15 B34-B38