# kaal:claim:5454054-008

**Claim.** Funding LER rewards out of marketing budgets keeps them off the balance sheet, because marketing spend is expensed immediately under U.S. GAAP (ASC 606) and IFRS 15 rather than deferred as revenue the way traditional loyalty points are.

**Type.** mechanism  **Support.** argued

**Holds when.**

- rewards funded from marketing budgets rather than issued as redeemable obligations

**Source quote.**

> LER optimizes issuer benefits by funding rewards from issuers' marketing budgets. As such, they are treated as immediate expenses under U.S. GAAP (ASC 606) and IFRS 15. This avoids balance sheet liabilities associated with traditional loyalty points' deferred revenue.

**From.** Wulf A. Kaal, *Liquid Equity Rewards* (2025), Balance Sheet Benefits, page 12

**Cite as.** Wulf A. Kaal, Liquid Equity Rewards (2025). SSRN: https://ssrn.com/abstract=5454054

**Verify.** sha256 of source PDF `9f53a865e6f0e5424640779df8f9b50923cd7d05649301dd4cc727144749b6e6` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards.pdf

**Topics.** economics

**Keywords.** asc-606, ifrs-15, balance-sheet, deferred-revenue, marketing-budget

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/5583610-009

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