If the value of published subscriptions varies, how should revenue be recognized?

The correct approach to revenue recognition for varying published subscriptions is primarily guided by the principles of accrual accounting and the matching principle. Revenue should be recognized as it is earned, which in this context means recognizing it in relation to the estimated sales values of dispatched publications. This aligns revenue with the actual delivery of the service or product provided to the customer.

When a subscription is purchased, the revenue does not just belong to one point in time, like at the moment of payment or uniformly across the year. Instead, it reflects the value of the actual subscriptions that are fulfilled through the delivery of publications. If the subscriptions vary in nature or value, recognizing revenue based on the estimated sales values ensures that the revenue reflects the consumption of the service — thereby providing a more accurate financial picture of the business.

This method also takes into account the timing and effort involved in producing each publication, which can affect subscription value. For example, if a specific publication within the subscription is of greater value than others, it would be appropriate to recognize the associated revenue in line with the value delivered.

The other approaches do not fully align with the relevant accounting standards for revenue recognition as they either involve misaligning the timing of revenue recognition with the delivery or ignore the varying nature of the subscriptions