These credits can be redeemed in the future for free or discounted goods. This publication addresses the evolving issues in ifrs 15 for entities that have adopted it and for. Cl 8 ifric d20 customer loyalty programmes uk asb comment letter. Ifric, revenue recognition, customer loyalty programmes. Ifric applies to customer loyalty award credits that. Ias 18 revenue, ifric customer loyalty programmes, ifric 15 agreements for the. Ifric will be superseded by ifrs 15 revenue from contracts with customers which has a mandatory effective date of 1 january 2018. This paragraph was amended by ifrs editorial corrections 31 july 2012. Accounting for customer loyalty programmes purpose the purpose of this paper is to present the views and challenges from a range of accounting professionals. Cl o9 ifric d20 customer loyalty programmes dasc comment letter. Ifric also deals with the plethora of other programmes that have.
Entities use loyalty programmes to incentivise customers to buy additional. Adoption of ifric interpretation customer loyalty programmes. Accounting for customer loyalty programmes purpose the purpose of this paper is to present the views and challenges from a. Ifric provides guidance on how entities should account for customer loyalty programmes under the existing requirements of ias 18 revenue. Ifric customer loyalty programmes effect study report. On 28 june 2007, the international financial reporting interpretations committee ifric issued a new interpretation entitled customer loyalty programmes.
Ifric customer loyalty programmes, its effects on the information quality of. Accounting for loyalty programmes has varied, with many companies treating the cost of redeeming award credits as a marketing expense. Ifric addresses how an entity accounts for loyalty award credits that entitle customers to free or discounted goods or. According to ifric, a customer loyalty programme has the following characteristics. Ifric eliminates the current inconsistencies in practice regarding the accounting treatment of free or. Ifric is effective for annual periods beginning on or after 1 july 2008. From 1 july 2008 ifric becomes mandatory in australia, requiring a standardised deferred revenue treatment to account for a plethora of customer loyalty programmes clp. Entities use loyalty programmes to incentivise customers to buy additional goods or services. Industry views telecommunications industry accounting group. Accounting for customer loyalty programmes request. Entities grant credits in the form of points to customers with each purchase of goods or services. Ifric clarifies that loyalty programmes are multiple element arrangements, in which the consideration received for the. Ifric customer loyalty programmes the board has not undertaken any specific implementation support activities relating to this interpretation. An entity grants to its customers as part of a sales transaction, i.
Example 1awards supplied by the entity ie1 a grocery retailer operates a customer loyalty programme. Customer loyalty programmes are programmes whereby customers who buy goods or services are awarded credits such as reward points or travel miles by an entity. Ifric was issued on 28 june 2007 and should eliminate much of this diversity. Hk ifric int customer loyalty programmes 7 hk ifric int april 2012february 2014 illustrative examples these examples accompany, but are not part of, hk ifric int. The ifrs foundations logo and the ifrs for smes logo, the iasb logo, the hexagon device, eifrs, ias, iasb, ifric, ifrs, ifrs for smes, ifrs foundation, international accounting standards, international financial reporting standards, niif and sic are registered trade marks of the ifrs foundation, further details of which are available from the ifrs. Ifric customer loyalty programmes its effects gupea. According to ifric , a customer loyalty programme has the following characteristics. Ifric addresses accounting by entities that grant loyalty award credits such as points or travel miles to customers who buy other goods or services. Ifric customer loyalty programmes revenue youtube. This playlist contains sample videos of the tabaldi ifric customer loyalty programmes revenue video series. Ifric requires that the proceeds of the initial sale is split between.
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