If you go by some of the earlier posts on FT and other news articles it has been suggested that airlines periodically "settle" their award redemptions and mileage accruals. It does not seem as though they simply buy miles for $0.YYY. Instead they seem to settle net awards granted to each other and also miles granted to each others FF programs on a periodic basis.

This means that both redemptions and miles granted are taken into account. This makes sense. If only redemtptions are taken into account and not miles granted (future liability) what happens when a partnership is terminated? This is a big issue when airlines liberally grant awards for partners flts (for example AA gives 100% Plat bonuses on partner flts - only 4 AA flts needed per year and not even one if you take the PLAT challenge).

IN most cases, the value placed on miles "purchased" from a partner seem to be higher than the liability they carry on their own books (as everyone knows that this number is way too low for accounting purposes) but much lower than the wholesale price charged to non-airline partners.