Originally Posted by MarkXS
However, the unused miles do have a monetary value that has to be accounted for on their balance sheet as a liability. Essentially, it's an outstanding debt. Expiring the miles allows them to write that off. I'm not an accountant so I don't know all the details or the exact valuation, but there's more involved than just the administrative/computer costs.
Since it doesn't affect cash flow, I wouldn't get really excited about it. Yes, you improve the balance sheet, but for years the airline business has accumulated losses and look how many are still in business. Give me a bank account full of cash any day. Who cares whether you owe people free flights or not when you control the availability.