This free, guided checker walks your finance team through the key decision points for IFRS 15 Customer Loyalty Programmes. Answer a few questions to see the likely treatment and the evidence to document.
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Retail, airline, hotel, and payment programmes often grant points redeemable for goods, services, or discounts; assess whether points are material to revenue recognition.
Award-credit accounting does not apply; recognize the underlying sales under the ordinary IFRS 15 model without deferral for customer options.
Official guidance: IFRS issued standards
IFRS 15.B40 indicates loyalty points typically provide a material right and constitute a separate performance obligation distinct from the initial sale.
The option is not a material right, so no separate performance obligation arises; account for the incentive as a marketing offer under IFRS 15.B41.
Official guidance: IFRS issued standards
Step 2 requires identifying distinct promises; loyalty points are typically a separate obligation because they provide a material right to future goods or services.
Identify the points as a separate performance obligation conveying a material right before allocating the transaction price (IFRS 15.22; IFRS 15.B40).
Official guidance: IFRS issued standards
Estimate SSP using adjusted market assessment, expected cost plus margin, or residual approach; consider redemption rates, breakage, and point fair value.
Estimate the points SSP - reflecting discounts otherwise available and redemption likelihood - before allocating the transaction price (IFRS 15.78-79; IFRS 15.B42).
Official guidance: IFRS issued standards
Allocate the total consideration received on the triggering transaction between the product or service sold and the loyalty points using relative SSP.
Allocate the transaction price between the sale and the points obligation on a relative standalone selling price basis per IFRS 15.74.
Official guidance: IFRS issued standards
Recognize the allocated portion of transaction price for the primary product or service at the point control transfers, not when points are later redeemed.
Recognize the sale portion when control of the goods or services transfers (IFRS 15.31); defer only the amount allocated to the points.
Official guidance: IFRS issued standards
The loyalty obligation portion is a contract liability recognized as revenue when the entity satisfies the performance obligation by transferring promised goods or services on redemption.
Record the points portion as a contract liability until redemption or expiry (IFRS 15.106; IFRS 15.B40).
Official guidance: IFRS issued standards
Adjust SSP for the probability that points will be redeemed versus forfeited; update estimates each period when redemption patterns change.
Incorporate expected redemption into the SSP estimate and breakage into the release pattern (IFRS 15.B42; IFRS 15.B46).
Official guidance: IFRS issued standards
Recognize deferred revenue on redemption when the entity transfers the promised reward, and recognize breakage when the customer's right expires and the entity is no longer obligated (IFRS 15.B40; IFRS 15.B46). If the entity expects to be entitled to a breakage amount, recognize it in proportion to the pattern of rights exercised by customers rather than waiting for expiry; otherwise wait until exercise becomes remote.
Align revenue releases to redemption transfers and to the IFRS 15.B46 breakage pattern rather than issuance dates or arbitrary schedules.
Official guidance: IFRS issued standards
Maintain a rollforward linking points issued, redeemed, expired, and outstanding to the contract liability balance for disclosure and control purposes.
Build a contract liability rollforward tied to the loyalty points subledger to support the IFRS 15.116 contract balance disclosures.
Official guidance: IFRS issued standards
Disclose performance obligations, allocation methods, significant judgments on SSP and breakage, and contract liability movements related to loyalty points.
Loyalty programme recognition, allocation, and IFRS 15 disclosures appear complete; archive the memo and supporting models. Complete the IFRS 15.116-118 contract balance, IFRS 15.123 judgment, and IFRS 15.126(c) method disclosures before sign-off.
Official guidance: IFRS issued standards
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