FASB / IASB - Revenue recognition for credit card reward programs, transfers of nonfinancial assets 

May 29:  The FASB and IASB have reached decisions about the revenue recognition standard for credit card reward programs and certain sales and transfers of nonfinancial assets.

Credit card reward programs

The FASB and IASB decided not to provide additional guidance about the application of the revenue recognition guidance to credit card reward programs, which had been requested by constituents after the 2011 joint Exposure Drafts.

The constituents had asked for clarification concerning loyalty programs, award credits as performance obligations, cardholder contracts and merchant contracts.

Transfer of nonfinancial assets

The FASB tentatively decided that a forthcoming standard will apply to:

  • Sales and transfers of nonfinancial assets, including in-substance assets to customers and noncustomers whether held directly or in a subsidiary
  • Sales and transfers to a customer of nonfinancial assets that are a business

Also, the U.S. GAAP consolidations guidance will apply to sales and transfers to a noncustomer of nonfinancial assets that are business and not in-substance assets, whether held directly or in a subsidiary.

Read a May 2013 report [PDF 112 KB] prepared by KPMG LLP: Defining Issues: Revenue Recognition: Credit Card Reward Programs and Transfers of Nonfinancial Assets

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