Original Research
The accounting treatment of credit card rewards programmes: a South African perspective (Part 2)
Journal of Economic and Financial Sciences | Vol 10, No 2 | a14 |
DOI: https://doi.org/10.4102/jef.v10i2.14
| © 2017 Sophia Brink
| This work is licensed under CC Attribution 4.0
Submitted: 06 December 2017 | Published: 06 November 2017
Submitted: 06 December 2017 | Published: 06 November 2017
About the author(s)
Sophia Brink, Stellenbosch University, South AfricaFull Text:
PDF (331KB)Abstract
Most credit card issuers offer their card holders participation in a customer loyalty programme. On 1 July 2007 the IASB issued IFRIC 13 Customer Loyalty Programmes to give specific guidance to suppliers on the accounting treatment of customer loyalty programme transactions. Despite the fact that credit card rewards programmes are specifically included in the scope of this Interpretation, in practice not all credit card rewards programmes currently account for award credits under the revenue deferral model (IFRIC 13). These divergent practices make one question the relevance of the current guidance provided in IFRIC 13 to credit card rewards programmes; otherwise what is the reason behind credit card rewards programmes accounting for these transactions differently? During May 2014 the IASB and the United States Financial Accounting Standards Board (FASB), published IFRS 15 Revenue from Contracts with Customers intended to replace six existing Standards and Interpretations, including IFRIC 13. The aim of IFRS 15 is to streamline accounting for revenue across all industries and to correct inconsistencies in existing Standards and practices. Credit card rewards programme respondents raised many queries and uncertainties based on the proposed model but despite these concerns the Boards decided against providing any additional guidance to credit card rewards programmes. They indicated that they leave it up to management
Keywords
Award credits; customer in relation to the card issuer; IFRIC 13; IFRS 15
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Crossref Citations
1. An IFRS Decision Heuristic—A Model for Accounting for Credit Card Rewards Programme Transactions
Sophia M. Brink, Gretha Steenkamp
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doi: 10.3390/jrfm16030169