Original Research
The accounting treatment of credit card rewards programmes: a South African perspective (Part 1)
Journal of Economic and Financial Sciences | Vol 10, No 1 | a8 |
DOI: https://doi.org/10.4102/jef.v10i1.8
| © 2017 Sophia Brink
| This work is licensed under CC Attribution 4.0
Submitted: 06 December 2017 | Published: 06 June 2017
Submitted: 06 December 2017 | Published: 06 June 2017
About the author(s)
Sophia Brink, Stellenbosch University, South AfricaFull Text:
PDF (203KB)Abstract
Credit card rewards programmes are a common phenomenon in the South African market. On 1 July 2007 the International Accounting Standards Board (IASB) issued IFRIC 13 Customer Loyalty Programmes to give specific guidance to suppliers on the accounting treatment of customer loyalty programme transactions. Although 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). 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. Currently there is uncertainty whether or not a credit card rewards programme transaction falls within the scope of IFRS 15. Despite concerns raised the Boards decided against providing any additional guidance to credit card rewards programmes and 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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