Step 5 of the revenue model also requires that an entity assess whether it has satisfied performance obligations. Ifric and the ambiguities of revenue recognition introduction from 1 st july 2008 reporting entities in australia must apply ifric customer loyalty programmes. Sri lanka financial reporting standards slfrslkas transparency and governance through enhanced financial reporting. Purpose the purpose of this paper is to present the views and challenges from a range of accounting professionals, regulators and preparers with the introduction of a standardised approach to. Overall, we believe that the draft interpretation addresses an issue for which we believe there is need for an interpretation. This includes schemes as diverse as those offered by supermarkets, airlines, telecommunications operators, hotels and credit card issuers. There are ipsas equivalents of both these ifrss ipsas 19 and ipsas 9 respectively, but it is doubtful whether ifric 6 and ifric deal with activities, which will be relevant to many, if.
Step 5 of the revenue model also requires that an entity assess whether it has. Ifric customer loyalty programmes on 28 june 2007, the international financial reporting interpretations committee ifric issued a new interpretation entitled customer loyalty programmes. Ifric 12 service concession arrangements ifric customer loyalty programmes ifric 14 ias 19. Ifrs 15 revenue from contracts with customers 2 defined terms ifrs 15 defines the following terms that form an integral part of this ifrs. Ifric customer loyalty programmes effective date periods beginning on or after 1 july 2008 recognition of revenue applying ias 18 specific quantitative disclosure requirements.
Consolidated financial statements prepared in accordance. 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. Ifric customer loyalty programmes, its effects on the information quality of companies accounting. This version includes amendments resulting from ifrss issued up to 31 december 2010. Basis of preparation the principal accounting policies as set out below are. Philippine interpretation ifric, customer loyalty programmes this philippine interpretation requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the. Ifric 15 agreements for the construction of real estate. Ifric 11, ifrs 2 group and treasury share transactions ifric 12, service concession. Listing of international financial reporting standards. An entity grants to its customers as part of a sales transaction, i. If a customer buys goods or services, the entity grants the customer award credits.
This interpretation addresses the accounting by entities that operate, or otherwise participate in, customer loyalty programmes under which the customer can redeem credits for awards such as free or. Ias 18 revenue ifric construction contracts accounting for government grants and disclosure of government assistance customer loyalty programmes iasifrs sic ifric ias 11 ias 20 ifrs 15 revenue from contracts with customers ifric 18 transfers of assets from customers ifric 15 agreements for the construction of real estate ifric 12 sic 29. Accounting for customer loyalty programmes request. Ifric customer loyalty programmes the interpretation provides guidance on how entities should account for customer loyalty programmes by allocating revenue on sale to possible future award. Scope consensus ifric applies to customer loyalty award credits that. The amendments clarify that the fair value of award credits takes into account the amount of discounts or incentives that otherwise would be offered to customers that have not earned the award credits. Contract an agreement between two or more parties that. In july 2008 the board issued ifric 15 agreements for the construction of real estate.
Hkifricint customer loyalty programmes 5 hkifricint april 2012february 2014 effective date and transition 10 an entity shall apply this interpretation for annual periods beginning on. Hk ifric int customer loyalty programmes1 hk ifric int 15 agreements for the construction of real estate3 hk ifric int 16 hedges of a net investment in a foreign operation2 hk ifric int 17 distributions of noncash assets to owners4 1 effective for annual periods beginning on or after 1 july 2008. Ifric is effective for annual periods beginning on or. Cl 010 ifric d20 customer loyalty programmes acteo afep medef ifric comment lette. The interpretation is applicable to all entities that grant awards as part of a sales transaction including awards that can be redeemed for goods or. Consolidated financial statements prepared in accordance with.
A text based analysis of documents pertaining to ifric shows the. Philippine interpretation ifric, customer loyalty programmes, becomes effective for financial years beginning on or after july 1, 2008. Revenue, ifric, customer loyalty programmes, ifric 15, agreements for the construction of real estate, ifric 18, transfers of assets from customers and sic 31, revenuebarter transactions. The scope and authority of interpretations are set out in the preface to hong kong financial reporting standards. Agreements for the construction of real estate, ifric 18. The customer can redeem the award credits for awards such as free or discounted goods or services. If a customer buys goods or services, the entity grants the customer award credits often described as points. Withdrawn for periods starting on or after 1 january 2018 when ifric is superseded by ifrs 15 revenue from contracts with customers. Ifric customer loyalty programmes financial analysis. The interpretation was developed by the ifrs interpretations committee the interpretations committee to address the accounting by the entity that grants award credits to its customers. Applying ifrs ifrs 15 revenue from contracts with customers.
The guide is intended to serve as an illustrative tool for the reader in the application of ifric 12 service concession arrangements, providing analysis of the. May 21, 2008 the companies can follow paragraph or paragraph 19 and therefore practice is varying and the companies accounting is not comparable. Ifric has developed ifric customer loyalty programmes that regulate these programs so that they can be accounted for in an equal manner. Ifric customer loyalty programmeswas developed by the international financial reporting interpretations committee and issued by the international accounting standards board in june 2007. Ifric customer loyalty programmes effective for accounting periods beginning on or after july 1, 2008. Ifric 12 service concession arrangements effective january 1, 2008. Ifric will be superseded by ifrs 15 revenue from contracts with customers which has a mandatory effective date of 1 january 2018. Ifric is effective for annual periods beginning on or after 1 july 2008. Adoption of ifric interpretation customer loyalty programmes. Applying ifric , the entity allocates some of the consideration from the initial sale to the award credits as a liability its obligation to provide the awards. The ifrs foundation provides free access through basic registration to the pdf files of the current years consolidated ifrs standards part a of the issued standardsthe red book, the. Background on ifric customer loyalty programmes many entities operate schemes that are designed to encourage those who buy their goods or services to buy further goods or services from.
Ifric 18 clarifies the requirements of ifrss for agreements in which an entity receives from a customer an item of property, plant, and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services such as a supply of electricity, gas or water. Point program business support consulting accounting procedure of point program the international financial reporting interpretations committee ifric has issued an interpretation, ifric customer. As suggested by the title of the new revenue standard, ifrs 15 only covers revenue arising from contracts with. Interpretation customer loyalty programmes ifric 15 agreements for the construction of real estate ifric 18 transfers of assets from customers ifric 20 stripping costs in the production phase of a surface mine sic 27 evaluating the substance of transactions involving the legal form of a lease. Ifrs 15, replaces ias 11 construction contracts, ias 18 revenue, ifric customer loyalty programmes, ifric 15 agreements for the construction of real estate, ifric 18 transfer of.
Ifric is accompanied by illustrative examples and a basis for. On 28 june 2007, the international financial reporting interpretations committee ifric issued a new interpretation entitled customer loyalty programmes. Such programmes are often used by companies operating in e. Ifric addresses how an entity accounts for loyalty award credits that entitle customers to free or discounted goods or. Ifric ifric interpretation customer loyalty programmes references ifrs fair value measurement ias 8 accounting policies, changes in accounting estimates and errors ias 18 revenue ias 37 provisions, contingent liabilities and contingent assets background 1 customer loyalty programmes are used by entities to provide customers with incentives to buy their goods. Ifric and its accompanying documents have been amended by improvements to ifrss, issued in may 2010. These condensed consolidated interim financial statements were authorized for issue and approved by the board of. Ifric customer loyalty programmes considers the accounting and practical implications for telecom operators that arise from the guidance in ifric, customer loyalty programmes.
Ifric 11, ifrs 2 group and treasury share transactions ifric 12, service concession arrangements. Customer a party that has contracted with an entity to obtain goods or services that are an output. Ifric customer loyalty programmes was developed by the international financial reporting interpretations committee and issued by the international accounting standards board in june 2007. Effective for annual periods beginning on or after 1 january 2008. Ifric customer loyalty programmes, i fric 15 agreements for the construction of real estate, ifric 18 transfers of assets from customers and sic31 revenue barter transaction involving. International federation of accountants agenda item. One manifestation of this change in emphasis is the proliferation of customer incentive and customer loyalty programmes.
If an entity applies the interpretation for a period. Effective for annual periods beginning on or after january 1, 2011. Ifric applies to all entities that grant award credits as part of a sales transaction, including awards that can be redeemed for goods and services not supplied by the entity. The interpretation addresses accounting by entities that grant loyalty award credits points. Ifric 14, ias 19 the limit on a defined benefit asset, minimum funding requirements and their interaction. It then goes on to provide guidance on how the approach should be implemented. Ifric customer loyalty programmes 170 ifric 14 ias 19 the limit on a defined benefit asset, minimum funding requirements and their interaction 171 ifric 15 agreements for the construction of. Ifric provides guidance on how entities should account for customer loyalty programmes under the existing requirements of ias 18 revenue. It mentions that currently in india both the deferment model and provision model are prevalent. Paragraph 35 of ifrs 15 outlines the criteria used to assess whether an entity has. In every industry, and any company, customer loyalty marketing is an important pillar of corporate strategy.
Ifric interpretation customer loyalty programmes ifric is set out in paragraphs 111 and the appendix. Customer loyalty programmes ifric customer loyalty programmes was developed by the international financial. Hk ifric int is accompanied by illustrative examples and a basis for conclusions. Ifric addresses how an entity accounts for loyalty award credits that entitle customers to free or discounted goods or services for example, airline frequent flyer programmes. In june 2007 the board issued ifric customer loyalty programmes. Background on ifric customer loyalty programmes many entities operate schemes that are designed to encourage those who buy their goods or services to buy further goods or services from them. Accounting for customer loyalty programmes purpose the purpose of this paper is to present the views and challenges from a. Ifric accounting for customer loyalty programmes, which becomes effective for financial periods beginning on or after july 1, 2008, creates consistency in accounting for customer loyalty plans. Ifric customer loyalty programmes revenue in udemy.
The companies can follow paragraph or paragraph 19 and therefore practice is varying and the companies accounting is not comparable. Cl 8 ifric d20 customer loyalty programmes uk asb comment letter. According to ifric, a customer loyalty programme has the following characteristics. Ifric ifric interpretation customer loyalty programmes references ifrs fair value measurement ias 8 accounting policies, changes in accounting estimates and errors ias 18.
Ifric 14 ias 19 the limit on a defined benefit asset, minimum funding requirements and their interaction effective january 1, 2008. Ifric, revenue recognition, customer loyalty programmes. Philippine interpretation ifric , customer loyalty programmes, becomes effective for financial years beginning on or after july 1, 2008. Hong kong ifric interpretation customer loyalty programmes hk ifric int is set out in paragraphs 1 11 and the appendix.
Ifric 18 applies to agreements with a customer for the transfer of property, plant and equipment that is used to connect the customer to a network or provide the customer with an ongoing supply of goods or services. Contract an agreement between two or more parties that creates enforceable rights and obligations. Hkifric int 12 service concession arrangements hkifric int customer loyalty programmes hkifric int 14 hkas 19 the limit on a defined benefit asset, minimum funding requirements and their interaction hkifric int 9 and amendments on embedded derivatives hkas 39 amendments. Ifric customer loyalty programmes the board has not undertaken any specific implementation support activities relating to this interpretation. It does not apply to insurance contracts, financial instruments or lease contracts, which fall in. Ifric addresses accounting by entities that grant loyalty award credits such as points or travel miles to customers who buy other goods or services. Point program business support consulting accounting procedure of point program the international financial reporting interpretations committee ifric has issued an interpretation, ifric customer loyalty programmes see table below. Ifric customer loyalty programmes its effects on the. Ifric states that approach a above is the correct interpretation of ifrs.
It also applies if the customer transfers cash to the entity and that cash is used only to build an asset that is used to connect the. Deloitte has submitted to the iasb comments on ifric s draft interpretation d20 customer loyalty programmes. Industry views telecommunications industry accounting group. Ifric and the ambiguities of revenue recognition introduction from 1 st july 2008 reporting entities in australia must apply ifric customer loyalty programmes 1 ifric, 2007. In effect, the award is accounted for as a separate component of the sale transaction. Ifric applies to customer loyalty award credits that. This interpretation addresses the accounting by entities that. Condensed consolidated interim financial statements unaudited. The ifrs taxonomy elements related to these superseded. Jun 30, 2017 customer loyalty programmes, ifric 15, agreements for the construction of real estate, ifric 18, transfer notes to the interim condensed consolidated financial statements june 30, 2017. The limit on defined benefit asset, minimum funding requirements and their interaction none of the standards or interpretations adopted had any impact on the financial statements. Entities use loyalty programmes to incentivise customers to buy additional.
International financial reporting standards presentation. While frequent flyer miles and reward flights have become standard practice in the airline industry. This second edition of customer loyalty programmes and clubs, explains how the key to effective protection against competition lies in identifying and offering your customers the right combination of financial and nonfinancial benefits. Aasb interpretation customer loyalty programmes as amended is set out in paragraphs 1 11 and. Ias 19 the limit on a defined benefit asset, minimum funding requirements and their interaction ifric 15. Hkifricint 4 is accompanied by illustrative examples and. Hkifric interpretation 4 determining whether an arrangement contains a lease hkifricint 4 is set out in paragraphs 117 and the appendix. These customer loyalty programmes can take many different forms. The interpretation was developed by the ifrs interpretations committee the interpretations committee to address the. Ifric customer loyalty programmes ifrs standards tracker. Ifric draft interpretation d20 customer loyalty programmes is published by the international accounting standards board iasb for comment only.
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