Problem 2-1 Multiple choice (IFRIC 13)

1. It is a marketing scheme whereby an entry grants award credits to customers and the
entity can redeem the award credits in exchange for free or discounted goods or
services.

a. Customer loyalty program

b. Premium plan
c. Marketing program
d. Loyalty award

2. The award credits granted to customers under a customer loyalty program is often
described as

a. Points
b. Awards
c. Credits
d. Royalty

3. The consideration allocated to the award credits is measured at

a. Fair value of the award credits

b. Carrying amount of goods to be received in exchange
c. Fair value of goods to be received in exchange
d. The proportion f the fair value of the award credits relative to the total
consideration received from the initial sale of goods

4. Under a customer loyalty program, if the entity supplies the award itself, the
consideration allocated to the award credits

a. Shall be recognized as revenue immediately

b. Shall not be accounted for as revenue separately
c. Shall be recognized as deferred revenue and amortized as revenue over a
reasonable period not exceeding 5 years
d. Shall be recognized initially as deferred revenue and subsequently recognized as
revenue upon the redemption of the award credits

5. Under a customer loyalty program, if a third party supplies the award and the entity is
collecting the consideration for the award credits as principal in the transaction

a. The entity shall not recognize revenue from the award credits
b. The entity shall recognize initially a deferred revenue equal to the gross
consideration allocated to the award credits
c. The entity shall recognize initially a deferred revenue equal to the difference
between the consideration for the award credits and the amount paid by the
entity to the third party
d. The entity shall recognize immediately revenue equal to the gross consideration
allocated to the award credits