AASB 15 breakage, in four journal entries

Gift voucher accounting sounds simple until it isn't.

A customer pays you $150 today. Six months later, they use $120 of it. The remaining $30 sits untouched until the voucher expires.

The question is not just "what happened to the $30?"

The real question is: when did you earn the revenue, when did the GST become reportable, and what does your balance sheet still owe?

That is where a lot of small-business voucher accounting quietly goes wrong.

This article walks through one face value voucher using a simple method: recognise revenue when the voucher is redeemed, and recognise any remaining breakage when the voucher expires or is no longer expected to be used.

For larger issuers with reliable historical redemption data, AASB 15 also allows expected breakage to be recognised in proportion to the pattern of redemptions. Most small businesses will not have enough data to do that safely, so the simpler expiry-based method is usually the cleaner starting point.

This is an explainer, not accounting advice. Your accountant should confirm the treatment for your business.

The scenario

Voucher issued: $150 face value voucher Issue date: 14 February 2026 Business: Bluesky Spa Pty Ltd

Partly redeemed: $120 treatment Redemption date: 22 August 2026

Expired: remaining $30 Expiry date: 13 February 2029

For the example, assume the voucher is a face value voucher. That means GST is generally not reported when the voucher is sold. GST is dealt with when the voucher is redeemed for taxable supplies, or when an unredeemed amount later triggers an adjustment.

Entry 01 - At sale

When the customer pays $150 for the voucher, you have cash - but you have not yet delivered the treatment.

In accounting terms, the business has taken on an obligation. The customer, or whoever receives the voucher, now has a right to future goods or services. AASB 15 recognises revenue when the performance obligation is satisfied, not simply because cash arrived.

Journal 01 · At sale · 14/02/2026

No GST. No revenue. Just a swap on the balance sheet: cash in, liability up. Xero account code 840 (or equivalent) is a common choice for the voucher liability account.

If your bookkeeper is posting this as revenue on the day of sale, your BAS for that period likely overstates GST-taxable sales. Worth raising with your accountant.

Entry 02 - At redemption

Six months later, the customer books a $120 massage and hands over the voucher. This is the taxable supply.

The voucher liability comes down by $120, revenue is recognised, and GST is recognised on the supplied value - 1/11 of $120, or $10.91.

Journal 02 · At redemption · 22/08/2026

GST is recognised on the $120 actually supplied, not the $150 originally paid. The remaining $30 of liability stays on the balance sheet pending redemption or expiry.

The common mistake is not the redemption entry itself. It is forgetting the residual is still there - sitting on the balance sheet, quietly overstating your liabilities until it is either redeemed or aged out.

Entry 03 - At expiry (breakage)

Fast forward to 13 February 2029. The $30 residual has sat untouched for 30 months. The voucher has now passed the ACCC three-year minimum and is no longer a valid claim on the business.

Under AASB 15, unexercised customer rights are commonly referred to as breakage. If the business does not recognise expected breakage earlier, it recognises the breakage when the likelihood of the customer exercising the remaining right becomes remote.

For a face value voucher, there is also a GST issue. The ATO's voucher guidance includes increasing adjustments for unredeemed vouchers, so the expired $30 should not simply be moved to breakage revenue gross. The GST component needs to be separated.

For a GST-inclusive $30 residual, the GST adjustment is 1/11 of $30, or $2.73.

Journal 03 · Voucher expired · 13/02/2029

Result: the remaining liability is cleared. The net amount becomes breakage revenue. The GST increasing adjustment is recorded.

This is the entry many businesses miss entirely. The voucher expires, the customer never comes back, and the remaining balance sits in a spreadsheet or liability account for years.

Entry 04 - Optional expected breakage

There is a more advanced method.

If a business has reliable redemption history, AASB 15 allows expected breakage to be recognised in proportion to the pattern of rights exercised by customers.

In plain English: if you have enough evidence to estimate that a certain percentage of voucher value will never be redeemed, you may be able to recognise that expected breakage progressively as customers redeem the rest.

That is not where most small businesses should start.

Expected breakage needs a defensible estimate, a consistent policy, and enough historical data to support the redemption curve. If you sell a few dozen or a few hundred vouchers a year, expiry-based recognition is usually much easier to explain and much harder to get wrong.

Journal 04 · Expected breakage · optional method

Important: this entry is shown to explain the shape of the method, not to recommend it. The timing and GST treatment should be confirmed with your accountant before using expected breakage.

When not to use expected breakage

If you cannot draw a credible redemption curve from your own voucher history, do not guess.

For most small businesses, the clean method is:

1. record the voucher sale as a liability,
2. recognise revenue and GST as the voucher is redeemed,
3. clear any remaining liability when the voucher expires or is no longer expected to be used,
4. have your accountant confirm the breakage and GST treatment.

Expected breakage is useful for larger issuers with volume, history, and a policy. It is not something to invent because the spreadsheet looks untidy.

Picking a method and sticking to it

The most important thing about breakage recognition is not choosing the fanciest method. It is choosing a method your accountant can defend, then applying it consistently.

Switching between methods year to year is how a simple voucher cleanup becomes a long audit conversation.

For most small businesses, the first method is enough.

How VoucherGrid handles this

VoucherGrid is built around the simple version first.

When a voucher is sold, VoucherGrid records the liability. When it is redeemed, VoucherGrid reduces the liability and records the redemption. When it expires, VoucherGrid surfaces the remaining balance for breakage and GST review.

On eligible plans, VoucherGrid can sync structured journal entries to Xero or QuickBooks. On every plan, it keeps the source records your accountant needs: issue date, expiry date, voucher type, redemption history, remaining balance, status changes, and audit trail.

For businesses that eventually need expected breakage reporting, the important foundation is already there: clean voucher history by cohort.

In the product

The Outstanding Liability Report shows your voucher liability at any date, including opening balance, new sales, redemptions, expiries, adjustments, and closing balance.

The Breakage Schedule shows vouchers that have expired or are due to expire, with remaining balances ready for accountant review.

The Redemption Ledger shows what was used, when, by whom, and against which voucher.

That is the difference between voucher accounting and voucher guessing.

The one thing to get right

When someone buys a face value voucher, your bank balance goes up and your liabilities go up.

Nothing else has happened yet.

Revenue and GST enter the story when the voucher is redeemed, or when an unredeemed balance is no longer expected to be used and needs to be reviewed for breakage.

Get that right, and the rest of voucher accounting becomes much easier to follow.

Get it wrong, and every BAS, year-end, and client question becomes a reconstruction job.