The Sage Group plc – Annual report – 30 September 2025
Industry: software
3.1 Revenue
1 Basis of preparation and accounting estimates and judgements (extract)
Accounting estimates and judgements (extract)
Revenue recognition (judgement)
Over a third of the Company’s revenue is generated from sales to business partners rather than end users. The key judgement is determining whether the business partner is a customer of the Group. The key criterion in this determination is whether the business partner has taken control of the product. Considering the nature of Sage’s subscription products and support services, this is usually assessed based on whether the business partner has responsibility for payment, has discretion to set prices, and takes on the risks and rewards of the product from Sage.
Where the business partner is a customer of Sage, commissions are remunerated in the form of a discount and are recognised as a deduction from revenue.
Where the business partner is not a customer of Sage and their part in the sale has simply been in the form of a referral, they are remunerated in the form of a commission payment. These payments are treated as contract acquisition costs (see note 8.1).
Accounts examples 