Gift voucher accounting sounds simple until cash, redemption, GST and breakage happen in different periods.
This article explains the general questions to review before recognising unredeemed voucher value. It distinguishes operational expiry, accounting recognition and GST treatment.
This is general information, not accounting or tax advice. Your accountant should confirm the assumptions, account mappings and recognition policy for your business.
Worked journal example withheld
The worked journal example is not published while it awaits professional review. The general explanation and cited sources remain available below.
Portfolio-based expected breakage
AASB 15 also allows expected breakage to be recognised in proportion to the pattern of customer rights exercised where the business expects to be entitled to that amount and the estimate satisfies the variable-consideration constraint.
The appropriate approach depends on the business's evidence and accounting policy.
In practice, a business would normally support the estimate using a sufficiently large and consistent portfolio or cohort. For example, if reliable history showed that a cohort was expected to redeem 80% of issued value, expected breakage could be recognised proportionally as that expected redemption occurred.
This approach requires:
- reliable historical redemption data;
- a documented cohort or portfolio method;
- a consistent accounting policy;
- regular reassessment of the estimate; and
- accountant approval.
The GST timing also needs separate confirmation. Division 100 links the increasing adjustment to the point at which an unredeemed reserve is written back to current income. Do not add a GST line to an expected-breakage journal merely to make the entry balance.
Choosing the accounting approach
| Approach | Recognition point | Evidence needed |
|---|---|---|
| No expected breakage recognised | When further exercise becomes remote | Valid terms, voucher history and the business's recognition policy |
| Expected breakage | Proportionally as customer rights are exercised | Reliable historical data, constrained estimate and documented policy |
A cohort model, probability model or other analytical technique may support the estimate, but it does not create a third accounting treatment. The accounting conclusion still follows one of the two approaches above.
How VoucherGrid supports the review
VoucherGrid maintains operational voucher records for review:
- issue date and original value;
- verified GST profile and saved voucher category;
- partial and full redemptions;
- remaining balance;
- refunds, voids and expiry events;
- location and user or system attribution; and
- the event history used by reports and accounting exports.
Xero and QuickBooks activation and journal delivery are currently held, as are complete accounting totals, BAS outputs and the Breakage recognition log. Operational expiry does not by itself authorise accounting recognition. The worked journal example is withheld pending professional review.
The relevant reports include outstanding liability, voucher ageing, redemption activity and voucher revenue summaries. Exact report availability depends on the plan and the merchant's verified tax status.
The one thing to get right
Cash arriving is not, by itself, the end of a voucher transaction.
For a qualifying face value voucher:
- cash and a contract liability arise at issue;
- revenue and GST follow the taxable supply on redemption; and
- the remaining balance is recognised only under the business's documented breakage policy, with the applicable Division 100 adjustment.
Get the voucher evidence right first. The journals then have something reliable to describe.
