8 Replies Latest reply: Jul 25, 2011 2:41 AM by pingreeman RSS

New FASB Rules

Alumni Steward Platinum 8 Reviews
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Lodging companies will soon be required to account for revenue, whether from monies recieved or deferred loyalty revenue, according to this article.

 

"Marriott International—a major player in the global travel rewards marketplace—already appears to be in line with FASB’s proposed new rules, according to Hlavinka. In its earnings statements, Marriott states that it defers revenue on rewards programs, equal to the fair value of their future redemption options."

 


(For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    shoeman1000 Platinum 4 Reviews
    Currently Being Moderated

    SS

     

    will this get me an upgrade to a suite?

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    Alumni Steward Platinum 8 Reviews
    Currently Being Moderated

    yes

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    shoeman1000 Platinum 4 Reviews
    Currently Being Moderated

    sweet!

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    pingreeman Platinum 1 Reviews
    Currently Being Moderated

    What this really means is that Marriott has to carry on its books a liability for the value of the billions of unused points.

     

    What this implies is that if Marriott (or an airline with miles) wants to improve their bottom line in any year, they simply UP the number of points required to get a free room which devalues the points, reduces the liability, and creates "income from other sources" or a reduction in current liabilities.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    shoeman1000 Platinum 4 Reviews
    Currently Being Moderated

    Pingreeman

     

    you are right on!  Rest assured that they have been taking advantage of that accounting practice all along.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    arkwright Platinum 2 Reviews
    Currently Being Moderated
    • Exactly; very well put: and it follows that inevitably we will be vulnerable in direct proportion to the amount of points we hold.
    • Perhaps the only consolation is that most governments have yet to find an efficient way of including rewards as benefits in kind when it comes to calculating tax liabilities. I live in hope.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    mikiegfla Platinum 4 Reviews
    Currently Being Moderated

    While on the subject, any idea how much Marriott compensates a property for a "free" stay? I'm sure it varies by property but is it highly discounted or close to the rack rate?

     

    I've always been curious but never able to find information on this.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: New FASB Rules
    pingreeman Platinum 1 Reviews
    Currently Being Moderated

    M-FLA: It's very close to 50-cents on the dollar of the rack rate (a FF GM told me this).

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

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