• IAS 18 Revenue
  • IAS 37 Provisions, Contingent Liabilities and Contingent Assets
  • IAS 38 Intangible Assets


  • IFRIC D20 was issued 7 September 2006. Click for Press Release (PDF 62k).
  • Comment deadline was 6 November 2006
  • The draft Interpretation was available publicly on the IASB's Website during the comment period.
  • IFRIC Interpretation 13 Customer Loyalty Programmes was issued 28 June 2007. Click for Press Release (PDF 63k).

Deloitte Letter of Comment on this Draft Interpretation

Important: IFRIC D20 resulted in the final IFRIC Interpretation 13, issued 28 June 2007. The information on this page reflects the IFRIC's discussions during the development of the final interpretation, including tentative decisions that were changed along the way. We have retained this page for historical purposes only.

Summary of IFRIC D20

Customer loyalty programmes are used by entities to provide customers with incentives to buy their products. Each time a customer buys goods or services, or performs another qualifying act, the entity grants the customer award credits (variously described as 'points', 'air miles' etc). The customer can redeem the award credits for awards such as free or discounted goods or services.

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 (ie applying paragraph 13 of IAS 18); or
  • 2. Recognising the original revenue in full and, concurrently, recognising a provision for the estimated future costs of supplying the goods or services (applying paragraph 19 of IAS 18).

If '1' is appropriate (allocating a portion of the original consideration to the award credits), additional questions are how much to allocate and when it should be recognised as revenue.

In IFRIC D20, the IFRIC has proposed that an entity should:

  • 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.

The draft Interpretation would take effect three months after it is published as a final Interpretation, and would be applied retrospectively by restating prior period financial statements.

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