The fundamental question addressed by the IFRIC is whether the entity's obligation to provide free or discounted goods or services should be recognised and measured by:

1. Allocating some of the consideration received or receivable from the initial sales transaction to the award credits and deferring the recognition of revenue (i.e. applying paragraph 13 of IAS 18 Revenue); or
2. Recognising the original revenue in full and, concurrently, recognising a provision for the estimated future costs of supplying the award goods or services (applying paragraph 19 of IAS 18).

• Apply paragraph 13 of IAS 18 and account for award credits as a separately identifiable revenue component of the original sale transaction.
• Allocate the fair value of the consideration received or receivable from that original sale translation between the goods and services originally sold and the award credits granted based on the relative fair values of the components.