Challenges for loyalty program managers under ASC 606/IFRS 15

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Navigating the new revenue recognition standards

The converged standard on revenue recognition, ASC 606/IFRS 15, has raised the visibility of loyalty programs to company stakeholders by generating higher program liabilities, more strenuous reporting disclosures, and a new duty to clearly articulate the drivers of changes in estimates that flow through earnings. 

While operating under the new standard, loyalty program owners are encountering a number of challenges in several key areas, including:

  1. Identifying the different impacts of program levers, 
  2. Understanding key drivers of true-ups, 
  3. Monitoring assumptions, managing non-redemption expenses, and 
  4. Refining models that impact the loyalty deferred revenue balance.

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Actuarial Services Senior Manager, PwC US

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