I think your accounting analysis is accurate and that the accounting treatment of miles is unrealistic; I was simply saying that I do not think this silly accounting is even being noticed by executives. I think the executives are making the devaluation decisions based on economics, or their perceptions of economics, not the accounting treatment.

In my opinion, the accounting would have been more accurate if it completely ignored frequent flier miles. The terms and conditions create no legal liability to the airline with respect to future redemptions of unused miles, and no one can accurately determine the value, if any, of the miles, so it would have been better if no future liability is created when the miles are issued. Any attempt to predict the future just creates problems.