Income of the company and customer’s loyalty programs

Abstract

The article is about company’s income shaping by applying customer’s loyalty programs. As it reveals by the practice, companies widely applying loyalty programs, as an institutional form of communication for wide range of market participants. Loyalty programs, as a rule, contains instruments for increasing sales and selling additional products and services for existing customers. Performance of the company depends on its ability to generate enough inflows to payback operating costs and calculating profit. Our analysis shows that customer’s loyalty issues studying, as a rule, in the way to improve business competitiveness. Additionally, there is a necessity to negotiate all and any business decisions and also necessity of estimation its impact on company’s financial condition. The same time there are informational needs in the external analytics to proceed financial condition estimation and its dynamic. In that case company faces with the lack of transparency and objectivity of the information provided by financial reports. Company’s income shaping is a multifactorial process. The key value for the company’s financial reports belongs to income’s size and its dynamic. Withal, the size and dynamic of company’s income depends on the accepted accounting policy. The article studying issues about Russian companies accounting policy features linked to company’s income shaping by applying customer’s loyalty programs and its accounting and disclosure in the financial reports. In the current article we also paid attention to issues linked to the inflows information disclosure under International financial reports standards (IFRS). Defined, that customer’s policy development should be comprehensive, namely directed and to generate enough inflows, and defining its impact on financial reports and liabilities structure.