Transparent Points

Transparent Points

The Financial Accounting Standards Board (FASB) in a draft “exposure” document has stated that hotel chains will now be required to report members’ unused loyalty points in a more transparent way in their earnings statements. Hotel companies will account for the issuance of points as a separate component of the sale. For example, a sale of $1,000 will be recorded in two parts: $950 of revenue to show up on the profit and loss statement immediately, and deferred revenue of $50 for the points value. Some hotels already report their earnings in a similar fashion while others will have to change the way they currently report.

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