Originally Posted by
Adam Smith
There's no liability related to status on the balance sheet. These changes might reduce their 2026 expenses and/or increase 2026 revenues - they certainly hope it will do one or both - but it doesn't affect anything on the balance sheet.
Not to get overly pedantic, but I believe cash generated by ‘selling’ points is not a revenue per se but rather should be counted as an asset (cash advance received) and a liability (due in points value to the user) until it is spent by the user or an entry is made to write off the liability due to breakage et al. …though I'm not an accountant by any means. Since the CRA only assess points for a user at redemption and not at accrual it’s only considered a revenue to the user when the points are used, and this logically should only count as such (revenue and expense) to the airline accordingly.
In this way, the airline would not even pay taxes on all that cash until the points are used by the member or written off.
Again.. I’m not a tax expert.