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A review of the key concepts and principles of IFRIC 13 Customer Loyalty Programmes (Revenue)
The course includes principle lectures and a summary of the IFRIC Interpretation. These principles are then illustrated practically in class examples that focus on journalising the recognition and measurements principles contained in the Interpretation.
You will need to download the lecture slides and work through the lecture videos and the class examples.
The course is structured to assist three categories of delegates who require knowledge of International Financial Reporting Standards and related IFRIC Interpretations:
The Tabaldi approach is practical and our lecturers focus on making the sometimes complex principles of financial reporting simple and practical.
You will need to engage with the lecturer with pen in one hand and calculator in the other, mental application and a proactive approach will ensure that you master this topic under financial reporting and accounting.
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|Section 1: Instructions and notes to download|
Introduction and guidance (Read)
IFRIC 13 Lecture Notes(PDF)
|Section 2: IFRIC 13-Principles and Application|
What are customer loyalty programmes and do they affect your accounting records?This video will explain what a customer loyalty program and points are, and how to account for them. The key to remember is that different components of revenue must be accounted for seperately, and customer loyalty points will usually be part of a separate component that will need to form part of deferred revenue until such time as the related revenue recognition criteria are met.
How do you measure the deferred revenue arising from customer loyalty points?
It is very important that they are measured with reference to their fair value (how much could the points / credits be sold fo separately?).
This class example includes the subsequent measurement and journals for a customer loyalty programme. Remember, the measurement of the customer loyalty points / credits is based on an estimate (refer IAS 8 for changes in estimates requiring prospective change). The trick is to use the total number of points expected to be redeemed, not the actual total of points awarded when doing the pro-rata realisation to profit or loss.
Does it make a difference if you are awarding customer loyalty points / credits for your own products / services (principle), or for products supplied by a third party (principle or agent).
Yes it does, just remember that if you are acting as an agent you will only recognise the revenue based on consideration allocated to the points / credits less amounts payable to the third party - so very similar to commission!
Tabaldi Education is an organisation that specialises in Accounting and Financial Reporting training and consulting.
Our lecturing team at Tabaldi consists of a group of highly qualified Chartered Accountants who have lectured at undergraduate and postgraduate level, as well as having presented professional accounting training around the world.
Richard Starkey one of Tabaldi's leading lecturers has had years of experience lecturing and consulting for large international corporates, including the big four audit firms within South Africa. Listed companies in Europe, Africa and the Middle East. Richard is passionate about helping people master the basic principles of financial reporting, and takes an interactive journal driven approach to his lectures.