Illustration IFRS 15

An entity, a grocery retailer, operates a customer loyalty

program.
The entity grants program members loyalty points when
the spend a specified amount on groceries.
Program members can redeem the points for further
groceries. The points have no expiry date.
The sales during 2016 amounted to P7,200,000 based on
standalone selling price
During 2016, the customers earned 10,000 points . But
management expects that 80% or 8,000 of these points
will be redeemed.

The stand-alone selling price of each loyalty point is

estimated at P100.
On the December 31, 2016, 4,000 points have been
redeemed in exchange for groceries .
In 2017, the management revised its expectations and
now expects that 90% or 9,000 points will be redeemed
altogether.
During 2017, the entity redeemed 4,100 points. In 2018,
a further 900 points will be redeemed .
Management continues to expect that only 9,000 points
will ever be redeemed, meaning, no more points will be
redeemed after 2018.

Allocation of transaction price

Product sales

P7,200,000

Points stand-alone selling price (8,000*100)

800,000
Total

P8,000,000

Product sales (7,200,000/8,000,000*7,200,000)

P6,480,000
Points
720,000

800,000/8,000,000*7,200,000)

Total transaction price

P7,200,000