Alma Books Ltd. (Alma) is a national chain of bookstores. Alma earns revenue in several different ways: a. Sale of books and magazines to customers in its stores-customers pay cash or use debit or credit cards (Visa or MasterCard) to pay for their purchases. b. Online sales-customers can browse for books on the company s Web site and make purchases online using a credit card or PayPal. Alma ships the order as soon as it s available. Customers sometimes have to wait if an item isn t in stock. c. Loyalty program-customers pay $20 per year for membership and receive discounts on their in-store or online purchases. Membership is for one year from the date of purchase. d. Sale of gift cards-the cards, which can value from $5 to $500, allow customers to purchase items in the store or online without using their own cash. There are no service charges associated with the cards. Required: Use the five IFRS revenue recognition criteria to determine when revenue should be recognized for each source of revenue. Explain your reasoning.
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