'Deloitte Case Essay\r'

' trail offers existing customers (the â€Å"existent Customer”) a $25 acknowledgment (the â€Å"$25 Referral opinion”) if the Existing Customer refers a booster shot (the â€Å" smart Customer”) to Runway’s blade site and the New Customer corrupts merchandise from Runway. after(prenominal) a purchase is made by the New Customer, the Existing Customer receives a $25 credit to be applied to a future purchase from Runway.\r\nThe $25 Referral confidence represents the fair value of the exist Runway would pay to acquire a recent customer from an unrelated third party or merchandise firm who is not a purchaser of its products. The program is open to all of Runway’s customers and does not need to be combined with any(prenominal) initial or existing purchases. Required:\r\n1. How should the $25 Referral Credit be recorded in Runway’s Income Statement †as a decrease of revenue or as a marketing expense? Explain your answer and suppo rt it apply the FASB Codification. Your answer should include the Codification reference where you plant the applicable focus.\r\n2. When would Runway record the $25 Referral Credit?\r\nWhat ar the entries Runway would record when the $25 Referral Credit is earned by the Existing Customer? march entries in proper(a) journal entry form.\r\nWhat are the entries Runway would record when the $25 Referral Credit is redeemed against a $100 purchase made by the Existing Customer? Show entries in proper journal entry form.\r\n3. Runway is planning to usurp IFRSs in the near future. What is the relevant accounting steerage they would follow under IFRSs? State the proper guidance and give a brief summary of it.\r\n'