Ifric 13 vs. Ifrs 15

Attribute	Ifric 13	Ifrs 15
Scope	Guidance on the accounting treatment of customer loyalty programmes	Guidance on revenue recognition from contracts with customers
Effective Date	Effective for annual periods beginning on or after 1 July 2008	Effective for annual periods beginning on or after 1 January 2018
Objective	Provide guidance on the accounting for customer loyalty programmes	Provide a single, comprehensive revenue recognition model
Measurement	Measurement based on fair value of consideration received or receivable	Measurement based on the consideration expected to be received in exchange for goods or services

Introduction

IFRIC 13 and IFRS 15 are both important accounting standards that provide guidance on revenue recognition. While they both focus on revenue recognition, there are key differences between the two standards that companies need to be aware of. In this article, we will compare the attributes of IFRIC 13 and IFRS 15 to help readers understand the differences between the two standards.

Scope

IFRIC 13, also known as Customer Loyalty Programs, provides guidance on how to account for loyalty programs offered by companies to their customers. It specifically addresses how to recognize revenue associated with these programs. On the other hand, IFRS 15, Revenue from Contracts with Customers, provides a comprehensive framework for recognizing revenue from customer contracts. It covers a wide range of transactions, including the sale of goods, services, and licenses.

Recognition Criteria

One of the key differences between IFRIC 13 and IFRS 15 is the recognition criteria for revenue. IFRIC 13 requires companies to recognize revenue associated with customer loyalty programs based on the fair value of the consideration received or receivable. This means that companies need to estimate the fair value of the loyalty points or benefits provided to customers. In contrast, IFRS 15 requires companies to recognize revenue when control of goods or services is transferred to the customer, based on the amount of consideration to which the company expects to be entitled.

Measurement

Another difference between IFRIC 13 and IFRS 15 is the measurement of revenue. IFRIC 13 requires companies to measure revenue associated with customer loyalty programs at the fair value of the consideration received or receivable. This may involve estimating the fair value of loyalty points or benefits provided to customers. On the other hand, IFRS 15 requires companies to measure revenue at the transaction price, which is the amount of consideration to which the company expects to be entitled in exchange for transferring goods or services to the customer.

Disclosure Requirements

Both IFRIC 13 and IFRS 15 have specific disclosure requirements that companies need to comply with. IFRIC 13 requires companies to disclose information about the nature and extent of their customer loyalty programs, as well as the accounting policies applied to recognize revenue associated with these programs. Similarly, IFRS 15 requires companies to provide information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

Transition and Implementation

Transitioning to and implementing IFRIC 13 and IFRS 15 can be complex processes for companies. IFRIC 13 requires companies to apply the standard retrospectively, which means that they need to restate prior financial statements to reflect the new accounting policies. In contrast, IFRS 15 allows companies to choose between two transition methods: full retrospective application or modified retrospective application. Companies need to carefully consider the implications of each transition method and choose the one that best suits their circumstances.

Conclusion

In conclusion, IFRIC 13 and IFRS 15 are both important accounting standards that provide guidance on revenue recognition. While they both focus on revenue recognition, there are key differences between the two standards in terms of scope, recognition criteria, measurement, disclosure requirements, and transition and implementation. Companies need to carefully consider these differences and ensure that they comply with the relevant standard in their financial reporting.