Recently the (FASB) Financial Accounting Standards Board and (IASB) International Accounting Standards Board got together to try to make “revenue” mean the same thing in every industry and every country.
And while that might sound easy, it turns out that the US alone is notorious for having different rules for different economic sectors. So, the FASB and IASB set out to fix that.
In 2018, the new model guidelines they set for public companies went into effect. And in 2019? They go into effect for private companies.
In a nutshell, these guidelines are going to affect nearly every program you run as part of your rewards or loyalty program. The new accounting rules for loyalty programs—even programs as simple as “buy 9, get 1 free”—may force you to change how you represent the costs and revenue in your accounting system.
In the webinar, Andrew Robbins provides examples for both simple “buy 9, get 1 free” programs, plus more complicated points-based programs.
It’s likely that you track your “buy 9, get 1 free”-type program with an incremental cost/expense accrual accounting model. You’ll hear why the new accounting rules for loyalty programs will require you to change to a deferred revenue model.
You’ll also learn why some types of loyalty programs need to switch to deferred revenue models, others don’t. For example, while rewards programs need to switch to the deferred revenue model, general offers can remain on the incremental cost model. But what about e-clubs and challenged-based promotions? We’ll dig into those as well.
Take advantage of the 5-step process for implementing these new accounting rules for loyalty programs.
These new rules could have a major impact on your company’s accounting systems and you should be prepared.
Learn everything you need to know, with plenty of examples to help make the concepts clear. You can even download the video to review with your own accounting team.