Voucher

A cafe sells a customer a $100 gift card, so it has received cash but may still owe goods or services when the customer redeems the card, and recording all cash immediately as earned sales can misstate revenue. The issuer should define the voucher's monetary value, validity, where it works and whether it can be transferred or refunded.

A promotional code that takes 10% off a purchase is different from stored value paid for in advance, and the difference affects accounting and tax analysis. Under IFRS 15, a customer payment for future goods or services can create a contract liability until the issuer performs, and revenue generally follows the satisfaction of the obligation, although the exact accounting also depends on who issued and who accepts the voucher.

The issuer needs a register of codes sold, redeemed, refunded, replaced and outstanding, and should reconcile that register with cash receipts and sales records. Duplicate or counterfeit codes can create a loss even when the headline liability total looks right.

Suppose $80,000 of valid prepaid vouchers were sold and $55,000 redeemed, so the simple remaining balance is $25,000 before other valid adjustments. If $5,000 is properly recognised as expired or breakage under the relevant terms and standard, the illustrative liability becomes $20,000.

Do not recognise every expired voucher as revenue automatically, because IFRS 15 has guidance for customers' unexercised rights, often called breakage, the expected amount and timing of recognition require assessment, and legal rules may restrict expiry or use of unclaimed balances. A free discount coupon does not usually represent the same prepaid liability, since it may reduce the price of a later sale or form part of a broader contract, while a loyalty award or paid coupon can raise different obligations, so review the actual promise made to the customer.

VAT treatment is also separate from revenue recognition. The UAE VAT executive regulation has specific language about discounts and vouchers, including whether the customer paid consideration for the voucher, and a label in marketing copy cannot replace a tax classification.

Under Article 28 of that regulation, a supplier-funded discount requires the customer to benefit from the price reduction, and it also gives rules for voucher value in determining a discount and for an instrument with identifiable monetary redemption value, so read the full provisions before coding the tax treatment. A retailer accepting a third-party voucher should establish who owes the customer and who reimburses the retailer.

A platform could collect the cash while the merchant provides the goods, and the settlement contract determines amounts due between parties. The point of sale should capture voucher identifiers and remaining balance, because partial redemption may leave unused value and the customer receipt should show the new balance if the terms allow it, while an untracked paper slip can create a dispute later.

On a balance sheet, the outstanding amount is not necessarily equal to the face value of every code ever issued, since some were redeemed, some refunded and some may have been issued free, so reconcile by type and by issuer before reporting a liability. For an owner, distinguish prepaid value from a discount offer, write usable customer terms, track each code and check accounting and VAT separately, because the voucher is a promise whose cost and timing must be visible.