USA Free Training credits

Which is the correct accounting, Adjustment to Training or Product revenue?

  • Product Revenue

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  • Training Revenue

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Hello... my organization has recently changed its accounting method for Free Training credits. These credits are earned through booking/purchase thresholds for certain customers. Previously we adjusted Training revenue. New management believes it should be a true-up of additions/usage between deferred and PRODUCT revenue. These credits can then be used toward free training within the specified period. Which is the correct accounting?

Thanks!!
 

smallbushelp

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Not sure if you still need input on this issue, but here's my 3 cents worth for future viewers. Your question is unclear but I think that the new management needs to rethink their position. It sounds like you are accruing credits or "points" when a customer is purchasing certain products. Then when the customer has accrued enough points, you give them a discount (perhaps 100%) on the cost of training services. How do you record that transaction?

If that is the case, then it is a reduction of training revenue not product revenue.
 

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