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Hello! I am a CPA here to assist you with your tax questions.The referral fees would be a marketing expense.You could put them as a separate line item so you can track how much you are spending on this.In terms of accounting for referral fees, the same would be under GAAP as IFRS. However, switching to IFRS does have some implications.In my experience, companies that report under IFRS have a higher net income than do companies that report under US GAAP.GAAP is very conservativeAlso, liabilitiies such as your workers comp and healthcare accruals are stated at their present value under IFRS and in todays dollars in GAAP, which makes liabilities higher under GAAPI wrote a graduate research paper on the differences between GAAP and IFRS in relation to pension expense, and found that companies that reported under IFRS had a lower pension expense than their GAAP counterparts.JACUSTOMER-bicm7v4c- :Could we report referral credit as a reduction to revenue and why? Also, when would we report such a transaction, when do we recognize this expense? What transaction do we report when the referral credit earned by the existing customer? And what transaction do we report when it is redeemed?If we adopt IFRSs in future, what is the relevant accounting guidance we would follow in contrast to GAAP (in respect to referral credit)Megan C :Referral fees would be accounted for similar to commissions - they would be an expense, not a reduction of revenueYou would recognize this when the expense is incurred.Once the sale is made that the referral fee is due on, you would recognize the referral feeSo, you would upon the transaction debit referral fee expense and credit referral fees payableThen, when the referral fee is redeemed by the customer, you would debit referral fees payable and credit accounts receivable or cash if paid in cashIt's the same under GAAP and IFRS - there is no separate guidance on this in IFRS. IFRS is just a broad framework. It does not get detailed.JACUSTOMER-bicm7v4c- :Thank you very much!Megan C :You're welcome.