Loyalty Cards
lmiddleham
Registered Posts: 71 Regular contributor ⭐
Hi
I can't get my head round this at the moment, too early in the morning after a big night out!
A sole trader is offering loyalty cards where after 5 treatments, a client gets the 6th one free. The free treatment can be anything so the value of what they're getting can vary.
Do I have to provide anything in the accounts for this scheme?
Thanks
I can't get my head round this at the moment, too early in the morning after a big night out!
A sole trader is offering loyalty cards where after 5 treatments, a client gets the 6th one free. The free treatment can be anything so the value of what they're getting can vary.
Do I have to provide anything in the accounts for this scheme?
Thanks
0
Comments
-
lmiddleham wrote: »Do I have to provide anything in the accounts for this scheme?
From accounting point of view, there is nothing to be done.
Effectively what your client has done is sold 1 treatment for the price of 1.2 treatments
And 0.2 treatment will be delivered in future. therefore the sales values has already been collected with the previous 5 treatments
BUT this all done in disguise (a clever marketing ploy- like 3 for 2). You could theoratically argue that one may need to provide for accrued sales; but on the other hand hand one could easily argue that the selling price is for one treatment and not 1.2 sales, and the 6th treatment is advertising/promotional expense.
From the management point of view the client can keep the records of how many loyalty cards are issued and how many redeemed to see how sucessful this marketing strategy works.0 -
Thanks for your help.
I couldn't work out anything that would need to be provided but wasn't sure whether because nothing was needed or because I just couldn't figure out what was needed!0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership