Customer loyalty program – realization of the consideration attributable to the award credits
In 01, entity E generated sales revenue amounting to CU 1,000. According to IFRIC 13, CU 900 thereof was allocated to the main transactions and the remaining amount of CU 100 was allocated to the 100 award credits granted in 01 within the scope of a customer loyalty program. The award credits granted in 01 can be redeemed until the end of the year 03.
At the respective balance sheet dates, the following information is available in respect of the number of award credits redeemed until the end of the year, and with regard to the number of award credits that are expected to be redeemed in the future:
|
Redemption in |
31-Dec-01 |
31-Dec-02 |
31-Dec-03 |
|
|
1 |
20 |
20 |
||
|
2 |
40 |
52 |
||
|
3 |
20 |
18 |
||
|
Total |
80 |
90 |
It is presumed that the amount of CU 900 attributable to the main transaction has to be recognized as revenue in 01 in its entirety according to the rules of IAS 18.
Required
Prepare any necessary entries in E”s financial statements as at Dec 31 for the years 01–03.