Airlines Revenue Recognition Task Force 


    AICPA Revenue Recognition Task Forces are charged with developing revenue recognition implementation issues that will provide helpful hints and illustrative examples for how to apply the new Revenue Recognition Standard.

    Task Force Members:

    • Dave Dickson, Ernst & Young LLP (Chair)
    • Rachel Bell, Virgin America
    • Stewart Bell, United
    • Chris Berry, Alaska Air Group
    • LeAnna Buchwald, JetBlue
    • Mike Carreon, American Airlines
    • Robert Gordon, Deloitte LLP
    • Craig Isakson, KPMG LLP
    • Leah Koontz, Southwest Airlines
    • Craig Meynard, Delta
    • Simon Whitehead, PricewaterhouseCoopers LLP
    • Eric Woodward, Skywest
    Staff Contact: Yelena Mishkevich, ymishkevich@aicpa.org

    IDENTIFIED REVENUE RECOGNITION IMPLEMENTATION ISSUES

    Revenue recognition implementation issues identified by the Airlines Revenue Recognition Task Force, when available, will be posted here.  Full revenue recognition implementation issues will be posted below for informal comments after review by the AICPA Financial Reporting Executive Committee (FinREC).

    • This implementation issue will discuss considerations for applying the guidance in FASB ASC 606, including classification under principal vs. agent for arrangements that airlines have amongst each other to sell tickets under which one or more segments of the journey will be flown by another carrier.
    Issue # Description of Implementation Issue Status
    1 Regional contracts
    2 Joint venture revenue sharing agreements
    3 Passenger tickets – Breakage
    4 Ancillary services
    This implementation issue will discuss considerations for applying the guidance in FASB ASC 606 to ancillary services and related fees charged by airlines.
    Submitted to AICPA RRWG
    5 Interline transactions
    This implementation issue will discuss considerations for applying the guidance in FASB ASC 606, including classification under principal vs. agent for arrangements that airlines have amongst each other to sell tickets under which one or more segments of the journey will be flown by another carrier.
    Submitted to AICPA RRWG
    6 Loyalty (flown & sold miles)
    6a. Maintenance of database and customer list accounting and recognition of brand/customer list (sales-based royalties). Recognition of other co-brand deliverables (advertising, marketing, bounty, and bags/lounges)

    6b. Combined with 6a.

    6c. Determination of whether loyalty status constitutes a separate deliverable (in addition to flight and other loyalty components in a ticket or other transactions)
    This implementation issue discusses whether loyalty status is a separate performance obligation or a marketing incentive.
    Submitted to AICPA RRWG
    6d. Recognition of other co-brand deliverables (advertising, marketing, bounty, and bags/lounges)
    6e. Inclusion of profit sharing in co-brand valuation
    6f. Financing on advance mile purchases
    This implementation issue discusses whether miles accumulated in customer loyalty accounts and advance purchases of miles by financial institutions, in which the airline receives time value benefit, have a significant financing component.
    Submitted to FinREC
    6g. Co-brand arrangement adjustments for volume and overall transaction allocation
    6h. Estimating Standalone Selling Price
    This implementation issue discusses the acceptable methods for determining standalone selling price of mileage credits awarded to airline loyalty program members.
    Submitted to FinREC
    6i. Interline Loyalty transactions (wait for FASB to finalize principal vs. agent)
    7 Cargo transactions
    8 Accounting for Contract Costs - Commissions and Selling Costs
    This implementation issue provides considerations for determining whether typical costs incurred in obtaining a ticket qualify for capitalization and, if so, over what would be the appropriate amortization period.
    Submitted to FinREC
    9 Maintenance power-by-the-hour services
    10 Taxes
    11 Change Fees
    This implementation issue provides considerations for applying the guidance in ASC 606 to airline change fees, and whether changes made to an existing itinerary qualify as a distinct service, what would be the appropriate revenue classification, and if there are any unique disclosures to be made.
    Submitted to FinREC
    12 Disclosures
    13 Ticket Level Performance Obligations
    14 Transition


    FEEDBACK REQUESTED

    Draft Revenue Recognition Implementation Issues included for informal comment, when available, will be listed below.

    Respondents should submit any comments including the implementation issue number to revreccomments@aicpa.org by the dates noted below:

    Issue # Comment Due Date


    The Airlines Revenue Recognition Task Force recommends the following AICPA products for current revenue recognition issues:



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