1. Why did the IASB and the FASB jointly decide to amend their existing Revenue Standards?

2. What are the basic requirements of AASB/IFRS 15 Revenue from Contracts with Customers?

3. Are there any particular Industries that will be particularly impacted by the joint Revenue standard?

4.How should the company account for the Customer Loyalty Program in accordance with the new IFRS 15 Revenue from Contracts with Customers?

A company has introduced a new Customer Loyalty Program in January 2014 that rewards a customer with 1 point for every $10 purchase. Each point is redeemable for a $1 discount on future purchases, but the points must be redeemed within 12 months of being earned.

A previous Customer Loyalty Program that used a variable volume discount for future purchases has been discontinued due to its complexity.

At the end of the year $100,000 purchases (i.e. company sales) have been made, and 50% of the points have been redeemed. As the Customer Loyalty Program is a new initiative, the company estimates that 80% of customers may use their points before they expire.

The previous variable discount Customer Loyalty Program was accounted for under the former AASB 118 /IAS 18 Revenue at the time that the discount was exercised and as a reduction of the purchase cost.

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