Global Standards for the world economy

Sunday 30 April 2017

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Work plan for Interpretations

IFRIC 13 Customer Loyalty Programmes


IFRIC 13 addresses how companies, that grant their customers loyalty award credits (often called 'points') when buying goods or services, should account for their obligation to provide free or discounted goods or services if and when the customers redeem the points.

Reason for IFRIC 13

Until now, IFRSs have lacked detailed guidance in this area and practices vary. Some companies measure their obligation based on the value of the points to the customer. Others measure it at the (usually lower) cost to the entity of supplying the free or discounted goods or service.

Impact of IFRIC 13

  • IFRIC 13 is based on a view that customers are implicitly paying for the points they receive when they buy other goods or services, and hence that some revenue should be allocated to the points.
  • IFRIC 13 requires companies to estimate the value of the points to the customer and defer this amount of revenue as a liability until they have fulfilled their obligations to supply awards.
  • IFRIC 13 will standardise practices and ensure that entities measure obligations for customer loyalty awards in the same way as they measure other obligations to customers, ie at the amount the customer has paid for them.

Effective date

IFRIC 13 is mandatory for annual periods beginning on or after 1 July 2008. Earlier application is permitted.

Discussed by the IFRIC:

  • May 2007- Approval of the final Interpretation by the IFRIC
  • March 2007 Continuation of the IFRIC's redeliberations in the light of comments received
  • January 2007 - Comments received on draft Interpretation: (1) overall approach and scope
  • July 2006  - Alternative ways of accounting for forfeiture / Revised draft Interpretation for approval for publication.
  • May 2006  - First draft of draft Interpretation 
  • March 2006 - Issues paper comparing different accounting treatments

Discussed by the IASB:


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