Premium Rate / Shortcode Revenue (Revenue Share)
Recording the telecom's share of revenue from premium rate SMS or voice services.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premium Rate Receivable | Asset (+) | 5,000.00 | - |
| Premium Rate Revenue (Net Share) | Revenue (+) | - | 3,500.00 |
| Content Provider Payable (Revenue Share) | Liability (+) | - | 1,500.00 |
💡 Accountant's Note
The telecom acts as billing agent for premium services. Only the operator's revenue share (net of the content provider's share) is recognized as revenue. The content provider's share is a payable.
Practitioner & Systems Framework
💻 ERP Architecture
Premium rate services are managed through a shortcode management platform. The operator bills the subscriber at the premium rate and splits the revenue with the content provider per the revenue share agreement (typically 70% operator / 30% content provider, or vice versa). The operator's net share is recognised as revenue; the content provider's share is a liability until remitted. The IFRS 15 principal/agent analysis is critical here — the operator is typically an agent for the content (net presentation) but a principal for the connectivity (gross presentation), requiring careful disaggregation.
⚠️ Audit Flags
Auditors perform the IFRS 15 principal/agent analysis for each premium rate category — the operator's level of control over the content service determines gross vs. net presentation. Test that the revenue share split matches the signed content provider agreement. Confirm that premium rate charges comply with TRC regulations on consumer protection for premium services (subscriber opt-in requirements, charge caps). Test subscriber complaint data on premium rate charges — unauthorised charges indicate compliance failures.
📄 Required Documentation
Content provider agreement (revenue share percentage), IFRS 15 principal/agent analysis by service type, shortcode billing report (gross charges and operator/content provider split), content provider payable reconciliation, TRC premium rate regulatory compliance confirmation, and subscriber opt-in records.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.