Revenue Regconition And Accounting For Contingencies

Nowadays,the integration process of global economy speeds up,as a result,the competiton of the airline industry becoming more and more hot-white.Frequent Flyer Plan,as a way to attract clints,is becoming more and more important.The airline frequent flyer plan in our country has been developing for over ten years,but the frequent flyer accounting is far lag behind.The purpose of this paper is to enhance the country's airline industry,regulatory authorities and information users' attention to the frequent flyer accounting through frequent flyer program accounting research.The first part of the paper introduces three methods of the frequent flyer accounting:deffered revenue method,contingent liability method and incremetal cost method.The second part of the paper introduces the frequent flyer accounting of the five listed airline corperations in our country,especially that of China Eastern Air Holding Company and AirChinaLimited.Finally,through the comparation with the international airlines,considering our country's situation,the writer recommends that the incremental cost method is the most apropriate way to China,and also suggests a new way of disclosure which can bring more information to users.