Solving Loyalty Points Revenue Recognition AOs (ASPE 3400) | CPA Canada PEP and CFE

Описание: ► Check out loyalty points from IFRS 15 perspective here:    • Solving Loyalty Points Revenue Recognition...  

► Mallory, from Gevorg CPA coaching team, explains how to handle loyalty program AOs in CPA Canada PEP and CFE exams, under ASPE 3400 rev rec.

► Where IFRS 15 provides specific guidance in the application of the standard, ASPE 3400 is judgement-based for recognizing and measuring revenue.
► Using the same example as in our IFRS 15 video/blog, consider the loyalty program of Entity A that sells shoes. For every $1 worth of shoe purchases, a customer receives 1 loyalty point. These points can be spent on purchases from Entity A and each point equals $0.10 worth of purchases. Based on historical trends, Entity A expects 5% of points to expire being unredeemed. That’s to say, it’s expected that 95% of loyalty points will be redeemed. So far, Entity A has sold $1,000 of shoes during the period. Assume no liability has been recorded in Entity A’s financial statements.
► The amount of revenue to be recorded needs to be assessed for Entity A. Under ASPE, this is based on a risks and rewards model, as opposed to IFRS 15 where control is the primary indicator. In this case, Entity A has an obligation to provide rewards to the customers that have earned them and collected loyalty points. This will trigger a need to assess whether a liability exists and should in fact be recorded.

► Presented by Mallory Stevens, CPA

► Full blog post: https://gevorgcpa.com/solving-aspe-lo...

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Intro (0:00)
Core Concepts of ASPE (0:15)
Loyalty Program Example (1:07)
Separately Identifiable Components (1:52)
Revenue Performance (3:00)
Liability Criteria (4:40)
Measurement Criteria (5:30)
Additional Criteria / Treatment (6:09)