The International Accounting Standards Board (IASB) has issued IFRIC 13, Customer Loyalty Programmes. It is mandatory for annual periods beginning on or after 1 July 2008. Earlier application is permitted. IFRIC 13 requires that an entity that grants loyalty award credits (such as 'points' or travel miles) to customers who buy other goods or services to allocate some of the proceeds of the initial sale to the award credits and recognise these proceeds as revenue only when they have fulfilled their obligations. The amount allocated to the award credits should be measured by reference to their fair value - that is, the amount for which the award credits could be sold separately.
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