IFRIC 13: accounting for "customer loyalty programmes"



Publication Details

Chapple, S. H., Moerman, L. C. & Rudkin, K. M. (2010). IFRIC 13: accounting for "customer loyalty programmes". Accounting Research Journal, 23 (2), 124-145.


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 accounting for customer loyalty programmes (CLPs). It aims to highlight the ambiguities of the classification of commercial transactions, particularly the nature and timing of revenue recognition. Design/methodology/approach – Comment letters in response to the exposure draft D20 CLPs are analysed together with an exposition of the effect of International Financial Reporting Interpretations Committee (IFRIC) 13 on an early adopter, Qantas airlines. Findings – Despite limited support for the consensus view advocated in D20, the International Accounting Standards Board (IASB) has upheld the deferred revenue approach consistent with the anticipated outcome of the IASB and Financial Accounting Standards Board revenue recognition project. Research limitations/implications – The paper analyses the characteristics and views of lobbyists using the IFRIC process. The use of other discourse methodologies may present issues of power within this process. Practical implications – The paper highlights how the implementation of IFRIC interpretations has the potential to alter reported financial results. Originality/value – The paper highlights the lobbying process and interpretation process at an international level. It also illustrates how companies can engage accounting interpretations to manage earnings, particularly in times of economic challenges.

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