IASB September 2008

IFRIC 13 Customer Loyalty Programmes – fair value of award credit

IFRIC 13 uses the term ‘fair value’ to refer both to the value of the award credits and to the value of the awards for which the credits could be redeemed. The Board noted that this could be mis-interpreted to mean that the fair value of the award credits is the same as the fair value of the awards for which they could be redeemed, without regard to expected forfeitures. To address this, the Board tentatively decided to amend IFRIC 13 to clarify the measurement guidance for the fair value of the award credits. The Board also tentatively decided that the amendments should be applied prospectively. The Board directed the staff to draft amendments to paragraphs AG2 and IE1 of IFRIC 13.