Revenue – ifrs 15 handbook

Performance 
obligation
Stand-alone 
selling 
prices
Selling 
price ratio
Price 
allocation Calculation
Air ticket
1,000
1
91.7%
917 (1,000 
×
91.7%)
Points
90
2
8.3%
83 (1,000 × 8.3%)
Total
1,090
100.0%
1,000

---

© 2019 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
10 Other application issues | 281
10.4 Customer options for additional goods or services
| 
Notes
1. Stand-alone selling price for the air ticket.
2. Stand-alone selling price for the points (1,000 / 10 × 90%).
B recognises revenue for the air ticket of 917 on the flight date and revenue of 
83 for the points in proportion to the pattern of rights exercised by C.
B expects 90 points to be redeemed and recognises 0.92 (83 / 90 points) on 
each point when it is redeemed.
No significant financing component in most customer loyalty 
programmes 
IFRS 15.62, BC233
Customer loyalty programmes generally do not include a significant financing 
component even though the time period between when the customer loyalty 
points are earned and redeemed may be greater than one year. This is because 
the transfer of the related goods or services to the customer – i.e. use of the 
loyalty points – occurs at the discretion of the customer.
Cancellable customer loyalty programmes may be implicit 
performance obligations
Many customer loyalty programmes can be cancelled or changed by the issuer 
at any time. However, if the entity has a past practice that creates a valid 
expectation for its customers that it will fulfil its promises under the loyalty 
programme, then it accounts for the customer loyalty programme as a separate 
performance obligation. That is, the entity has made an implicit promise to 
operate the customer loyalty programme.