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Financial Asset Model
The operator recognizes a financial asset to the extent that it has an unconditional contractual right to receive cash or another financial asset from or at the direction
of the grantor for the construction services. The operator has an unconditional right to receive cash if the grantor contractually guarantees to pay the operator
1. Specified or determinable amounts
2. The shortfall, if any, between amounts received from users of the public service and specified or determinable amounts, even if payment is contingent on the
operator ensuring that the infrastructure meets specified quality or efficiency requirements
The operator measures the financial asset at fair value.
Intangible Asset Model
The operator recognizes an intangible asset to the extent that it receives a right (a license) to charge users of the public service. A right to charge users of the public
service is not an unconditional right to receive cash because the amounts are contingent on the extent that the public uses the service.
The operator measures the intangible asset at fair value.
Operating Revenue
The operator of a service concession arrangement recognizes and measures revenue in accordance with IAS 11 and 18 for the services it performs.
Accounting by the Government (Grantor)
IFRIC 12 does not address accounting for the government side of service concession arrangements. IFRIC 12 is effective for annual periods beginning on or after
January 1, 2008.
IFRIC 13, CUSTOMER LOYALTY PROGRAMS
This Interpretation applies to customer loyalty award credits that
1. An entity grants to its customers as part of a sales transaction (i.e., a sale of goods, rendering of services, or use by a customer of entity assets).
2. Subject to meeting any further qualifying conditions, the customers can redeem in the future for free or discounted goods or services.
This Interpretation addresses accounting by the entity that grants award credits to its customers as incentive to buy their goods and services.
According to the consensus in IFRIC 13
• An entity shall apply IAS 18 and account for award credits as a separately identifiable component of the sales transaction(s) in which they are granted (the
“initial sale”).
• The fair value of the consideration received or receivable in respect of the initial sale shall be allocated between the award credits and the other components of
the sale.
• The consideration allocated to the award credits shall be measured by reference to their fair value, (i.e., the amount for which the award credits could be sold
separately).
Effective date: This IFRIC was issued in June 2007 and is effective for annual periods beginning on or after July 1, 2008. Earlier application is permitted.
Facts
CASE STUDY 6
Locond, an airline, operates a customer loyalty program in which members are granted “loyalty points” when they buy airline tickets. Members can redeem
the points for air travel or other services with Locond or with its partner companies participating in the program, which include certain airline companies,
credit card companies, hotel chains, and car rental companies. In its previous financial statements, the accounting treatment for these points had been as
follows:
The estimated value of all the points outstanding was calculated as the estimated value of a point multiplied by the number of points granted, not yet
redeemed.
The estimated value of a point was not the fair value but was an estimate based on the specific terms and conditions of the program.
The estimated value of all the points was recognized as a deduction against revenue (not as an expense) and recognized as a liability on the statement of
financial position and described as deferred revenue.
The revenue for these points was recognized when the points were redeemed.