CUSTOMER LOYALTY PROGRAMMES ACCOUNTING ISSUES (SELLER’S SIDE)

Abstract

The article provides a brief overview of national and international standards for accounting discounts compared with bonuses accounting. While domestic bookkeepers still treat the costs of redeeming bonuses as selling/marketing expenses, IFRIC 13 ‘Customer Loyalty Programmes’ since 2007 has constituted the procedure of reporting information about the nature, amount and timing of revenue and cash flows under such program. In subsequent years in accordance with IFRS 15 ‘Revenue from contracts with customers’, the procedure of bonuses accounting was supplemented by the introduction of additional variables that must be taken into consideration – uncertainty and material right. The new standard introduces a five-step approach to bonus accounting, the last two of which regulate the allocation of the contract price to individual performance obligations and the recognition of income upon performance of obligations. All steps related to bonus accounting are illustrated with examples.